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In: Accounting

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

Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost pools:

Activity Cost Pool Activity Measure Expected
Overhead Cost		 Expected
Activity
Labor-related Direct labor-hours $ 30,115 1,585 DLHs
Purchase orders Number of orders $ 2,320 580 orders
Product testing Number of tests $ 6,930 330 tests
Template etching Number of templates $ 870 30 templates
General factory Machine-hours $ 65,100 9,300 MHs
 

2. The expected activity for the year was distributed among the company’s four products as follows:

  Expected Activity
Activity Cost Pool Product A Product B Product C Product D
Labor-related (DLHs) 625 160 400 400
Purchase orders (orders) 30 190 170 190
Product testing (tests) 190 55 0 85
Template etching (templates) 0 17 10 3
General factory (MHs) 3,600 1,700 1,700 2,300
 

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

 
 
  Total Overhead Cost
Product A  
Product B  
Product C  
Product D  

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ekkarill92 answered 3 years ago
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