Sultan Company uses an activity-based costing system At the beginning of the yea

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 five activity cost pools: Expected Overhead Measure Expected Activity Activity Cost Pool Labor-related Purchase orders Parts management Direct labor-hours Number of orders Number of part types Cost S 400,000 S 11.150 $ 40,000 DLHs 223 orders 101 part types 82,820 Board etching General factory Number of boards S 73,800 1,640 boards s 279,500 21,500 MHs Required: 1. Compute the activity rate for each of the activity cost pools. Activit Labor-related Purchase orders Parts management Board etching General factoryper Wr per DLH per order per part type per board 2. The expected activity for the year was distributed among the company's four products as follows Expected Activity Activity Cost Pool Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Product A 6,700 63 37 300 3,900 Product B 23,300 Product C 4,300 36 38 580 2,500 Product D 5,700 85 15 760 8,800 6,300 Using the ABC data, determine the total amount of overhead cost assigned to each product Overhead Cost Assigned Product C Activity Cost Pool Product A Product B Product LD Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total

Explanation / Answer

Answer =1) Calculation of the Cost Driver Rate Cost Driver Rate = Activity Cost / Cost Driver Activity Cost / Cost Driver = Activity Cost Driver   Activity Cost   "/"   Cost Driver " = " To Cost Driver Rate Labour Related Direct Labour Hours $               4,00,000.00 "/"                         40,000 " = " To                        10.00 Per DLH Purchase Orders Number of Purchase Orders $                   11,150.00 "/"                               223 " = " To                        50.00 Per Orders Parts Management Number of Parts Type $                   82,820.00 "/"                               101 " = " To                      820.00 Per Parts Type Board Etching Number of Boards $                   73,800.00 "/"                            1,640 " = " To                        45.00 Per Board General Factory Machiene Hours $               2,79,500.00 "/"                         21,500 " = " To                        13.00 Per MH Note: As per chegg answering guideline we have to answer the 1st question in the multiple question.

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