Question: 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
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 | $ | 311,500 | 44,500 | DLHs | ||
| Purchase orders | Number of orders | $ | 8,840 | 221 | orders | ||
| Parts management | Number of part types | $ | 71,280 | 99 | part types | ||
| Board etching | Number of boards | $ | 63,700 | 1,820 | boards | ||
| General factory | Machine-hours | $ | 148,000 | 14,800 | MHs | ||
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) | 6,800 | 27,300 | 4,600 | 5,800 | ||||||||
| Purchase orders (orders) | 51 | 29 | 49 | 92 | ||||||||
| Parts management (part types) | 34 | 17 | 33 | 15 | ||||||||
| Board etching (boards) | 500 | 770 | 550 | 0 | ||||||||
| General factory (MHs) | 2,100 | 6,300 | 2,400 | 4,000 | ||||||||
Using the ABC data, determine the total amount of overhead cost assigned to each product.
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