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Category > Accounting Posted 12 Aug 2017 My Price 9.00

Sultan Company

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 Estimated
Overhead Cost
Expected
Activity
Labor-related Direct labor-hours   $ 280,000   40,000 DLHs
Purchase orders Number of orders   $ 90,000   1,500 orders
Parts management Number of part types   $ 120,000   400 part types
Board etching Number of boards   $ 360,000   2,000 boards
General factory Machine-hours   $ 400,000   80,000 MHs

 

Required:
1. Compute the activity rate for each of the activity cost pools.

 

Activity Cost Pool Activity Rate
Labor-related $ per DLH
Purchase orders $ per order
Parts management $ per setup
Board etching $ per board
General factory $ per MH


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) 5,300 8,300 4,400 5,000
Purchase orders (orders) 55 34 23 94
Parts management (part types) 30 25 35 12
Board etching (boards) 480 904 393 0
General factory (MHs) 2,800 8,200 4,700 6,200

 

Using the ABC data, determine the total amount of overhead cost assigned to each product. (Leave no cells blank - be certain to enter "0" wherever required.)

 

  Overhead Cost Assigned
 
Activity Cost Pool Product A Product B Product C Product D
Labor-related (DLHs) $ $ $ $
Purchase orders (orders)        
Parts management (part types)        
Board etching (boards)        
General factory (MHs)        
 



Total $ $ $ $
 

 

Answers

(5)
Status NEW Posted 12 Aug 2017 01:08 PM My Price 9.00

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