Mathematics, 18.03.2021 04:10 lorihab1970
Sultan Company uses an activity-based costing system.
At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:
Activity Cost Pool Activity Measure Expected
Overhead Cost Expected Activity
Labor-related Direct labor-hours $ 142,500 28,500 DLHs
Purchase orders Number of orders $ 15,535 239 orders
Parts management Number of part types $ 65,450 85 part types
Board etching Number of boards $ 105,600 1,760 boards
General factory Machine-hours $ 144,000 18,000 MHs
Required:
1. Compute the activity rate for each of the activity cost pools.
2. The expected activity for the year was distributed among the company’s four products as follows:
Expected Activity
Activity Cost Pool Product A Product B Product C Product D
Labor-related (DLHs) 6,700 13,000 4,100 4,700
Purchase orders (orders) 66 28 48 97
Parts management (part types) 27 12 32 14
Board etching (boards) 510 720 530 0
General factory (MHs) 3,700 7,500 2,500 4,300
Using the ABC data, determine the total amount of overhead cost assigned to each product.
Answers: 1
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Sultan Company uses an activity-based costing system.
At the beginning of the year, the company mad...
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