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 Labor-related Purchase orders Parts management Board etching General factory Activity Cost Pool Labor-related (DLHs) Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Required 1 Required 2. Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Activity Cost Pool Expected Overhead Cost $ 156,000 $ 11,000 $ 80,000 $90,000 $ 180,000 Complete this question by entering your answers in the tabs below. Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total Product A 6,000 Purchase orders (orders) 60 Parts management (part types) 30 Board etching (boards) 500 General factory (MHs) 3,000 Using the ABC data, determine the total amount of overhead cost assigned to each product. S Expected Activity Product B 11,000 30 15 900 8,000 0$ Expected Activity 26,000 DLHS 220 orders 100 part types 2,000 boards 20,000 MHs Using the ABC data, determine the total amount of overhead cost assigned to each product. 0 S Product C Overhead Cost Overhead Cost Overhead Cost Overhead Cost Assigned Assigned Assigned Assigned Product A Product B Product C Product D 4,000 40 40 600 3,000 Product D 5,000 90 15 0 6,000 0 $
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 Labor-related Purchase orders Parts management Board etching General factory Activity Cost Pool Labor-related (DLHs) Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Required 1 Required 2. Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Activity Cost Pool Expected Overhead Cost $ 156,000 $ 11,000 $ 80,000 $90,000 $ 180,000 Complete this question by entering your answers in the tabs below. Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total Product A 6,000 Purchase orders (orders) 60 Parts management (part types) 30 Board etching (boards) 500 General factory (MHs) 3,000 Using the ABC data, determine the total amount of overhead cost assigned to each product. S Expected Activity Product B 11,000 30 15 900 8,000 0$ Expected Activity 26,000 DLHS 220 orders 100 part types 2,000 boards 20,000 MHs Using the ABC data, determine the total amount of overhead cost assigned to each product. 0 S Product C Overhead Cost Overhead Cost Overhead Cost Overhead Cost Assigned Assigned Assigned Assigned Product A Product B Product C Product D 4,000 40 40 600 3,000 Product D 5,000 90 15 0 6,000 0 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
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6.
int
rint
ences
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
Labor-related
Purchase orders
Parts management
Board etching
General factory
Activity Cost Pool
Labor-related (DLHS)
Activity Measure
Direct labor-hours
Number of orders
Number of part types
Number of boards
Machine-hours
Required 1 Required 2
Required:
1. Compute the activity rate for each of the activity cost pools.
2. The expected activity for the year was distributed among the company's four products as follows:
Activity Cost Pool
Product A
6,000
60
30
500
3,000
Labor-related (DLHs)
Purchase orders (orders)
Parts management (part types)
Board etching (boards)
General factory (MHs)
Total
Expected
Overhead Cost
$ 156,000
$ 11,000
$ 80,000
$ 90,000
$ 180,000
Complete this question by entering your answers in the tabs below.
$
Product B
11,000
30
15
900
8,000
0 $
Expected Activity
Expected Activity
26,000 DLHs
Purchase orders (orders)
Parts management (part types)
Board etching (boards)
General factory (MHS)
Using the ABC data, determine the total amount of overhead cost assigned to each product.
220 orders
100 part types
2,000 boards
20,000 MHs
0
Using the ABC data, determine the total amount of overhead cost assigned to each product.
Overhead Cost Overhead Cost Overhead Cost Overhead Cost
Assigned
Assigned
Product B
Assigned
Assigned
Product A
Product C
Product D
$
Product C
4,000
40
40
600
3,000
Product D
5,000
90
15
0
6,000
0
$
0
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