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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
|
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: |
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| Activity Cost Pool | Activity Measure | Estimated Overhead Cost |
Expected Activity |
||||
| Labor-related | Direct labor-hours | Â | $ | 280,000 | Â | 40,000 | DLHs |
| Purchase orders | Number of orders | Â | $ | 90,000 | Â | 1,500 | orders |
| Parts management | Number of part types | Â | $ | 120,000 | Â | 400 | part types |
| Board etching | Number of boards | Â | $ | 360,000 | Â | 2,000 | boards |
| General factory | Machine-hours | Â | $ | 400,000 | Â | 80,000 | MHs |
Â
| Required: | |
| 1. | Compute the activity rate for each of the activity cost pools. |
Â
| 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: |
Â
| Â | Expected Activity | |||
| Â | ||||
| 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 |
Â
|
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.) |
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| Â | Overhead Cost Assigned | |||
| Â | ||||
| Activity Cost Pool | Product A | Product B | Product C | Product D |
| Labor-related (DLHs) | $ | $ | $ | $ |
| Purchase orders (orders) | Â | Â | Â | Â |
| Parts management (part types) | Â | Â | Â | Â |
| Board etching (boards) | Â | Â | Â | Â |
| General factory (MHs) | Â | Â | Â | Â |
| Â | ||||
| Total | $ | $ | $ | $ |
| Â | ||||
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