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Sultan Company uses an activity-based costing system. At the beginning of the year, the company...

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Accounting

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 $ 158,800 39,700 DLHs
Purchase orders Number of orders $ 11,605 211 orders
Parts management Number of part types $ 90,470 109 part types
Board etching Number of boards $ 99,000 1,980 boards
General factory Machine-hours $ 139,300 19,900 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 companys four products as follows:

Expected Activity
Activity Cost Pool Product A Product B Product C Product D
Labor-related (DLHs) 6,700 23,100 4,200 5,700
Purchase orders (orders) 43 36 39 93
Parts management (part types) 24 19 50 16
Board etching (boards) 590 740 650 0
General factory (MHs) 3,700 8,200 2,900 5,100

Using the ABC data, determine the total amount of overhead cost assigned to each product.

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