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4 B D E TI 2 1 2 3 4 Origins Company has two main product linesProduct A and Product B. The company uses an activity-based costing system. Activity-based costing requires a cost driver for each cost pool. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools. Information about directly assigned costs is also provided. 5 6 7 8 9 10 Use the following information to assign the costs to the product lines using the activity- based costing approach. Assume that actual use of cost drivers is equal to expected use. 11 12 13 14 15 16 17 Activity Labor-related Purchase orders Parts management Rework requests General factory Total Estimated Cost $153,000 $10,000 $81,000 $92,000 $173,000 $509,000.00 18 10 20 21 Expected Driver Amount 22 23 24 Activity Labor-related Purchase orders Parts management Rework requests General factory Cost Driver Direct labor-hours (DLHS) Number of orders Number of parts Number of requests Machine-hours (MHS) Product A 5,500 60 35 400 4,000 Product B 11,000 40 20 800 9,000 25 26 27 28 29 30 Direct material and direct labor costs for Product A Direct material and direct labor costs for Product B Number of Product A units Number of Product B units $230,000 $280,000 $1,200 $3,100 31 32 33 34 Step 1: Using activity-based costing, fill in the green-highlighted cells to calculate the total cost for each product. 35 Activity Cost Pools 36 Estimated Overhead Cost Expected Use Cost Drivers Activity-Based Overhead Rates per DLH 38 39 Labor-related Purchase orders Parts management Rework requests General factory per per 40 41 per per 42 45 Activity Cost Pools Product A Activity-Based Overhead Rate Cost Assigned Use of Cost Drivers Product B Activity-Based Overhead Rate Use of Cost Drivers 46 Cost Assigned 17 48 49 50 51 Labor-related Purchase orders Parts management Rework requests General factory Total amount allocated Direct material and direct labor costs Total cost 52 53 54 55 57 58 Step 2: Using activity-based costing, fill in the green-highlighted cells to calculate the unit cost (i.e., cost per 59 or each product. 60 61 Product A Product B 62 63 Total cost Number of units Unit cost assigned to each product 64