Answer question #2 2. The expected activity for the year was distributed among t

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Answer question #2

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) Product testing (tests) Template etching (templates) General factory (MHs) Product A Product B Product C Product D 400 180 95 165 70 65 27 1,550 500 30 240 400 140 10 1,500 3,400 2,900 Using the ABC data, determine the total amount of overhead cost assigned to each product. Tota Overhead Cost Product A Product B Product C Product D

Explanation / Answer

SOLUTION

1. Activity rate-

2.

Activity cost pool Expected overhead cost ($) (A) Expected Activity (B) Activity rate (A/B) Labor-related 24,905 1,465 17 per DLH Purchase orders 840 420 2 per order Product testing 7,600 400 19 per test Template etching 1,080 40 27 per template General factory 46,750 9,350 5 per MH

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