ezto.mheducation.com Sylvan Company uses activity-based costing to determine pro
ID: 2600716 • Letter: E
Question
ezto.mheducation.com Sylvan Company uses activity-based costing to determine product costs for extenal financial reports. Some of the entries have been completed to the manufacturing overhead account for the current year, as shown by entry (a) below 2,407,000 At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Cost PoolActivity Measure Overhead Cost Activity 40,400 DLHs 1,600 orders Labour related Direct labour-hours $686,800 Number of orders Number of part types 423,200 Number of boards438,840 Machine-hours 44,800 Parts management Board etching General factory 460 part types 2,120 boards 771,400 81,200 MHs The activities during the year were distributed across the company's four products as follows Activity Cost Pool Labour related Purchase orders Parts management Board etching General factory Actual Activity Product B 7,900 370 135 1,010 Product A Product C Product D 42,400 DLHs 1,400 orders 13,700 10,900 9,900 590 110 80 470 330 120 520 470 part types 135 2,220 boards 220 24,400 20,400 20,20018,200 83,200 MHS Required: Compute the amount of overhead cost applied to each product during the year. (Do not round intermediate calculations.) Applied Overhead Product B tivity Cost Pool Labour related Purchase orders Parts management Board etching General factory Total Product A Product C Product D 0$ MacBook AirExplanation / Answer
ans)
Calculation of amount of overhead applied to each product during the year
232900
(13700 X 17 per DLH)
3080
(110 X 28 Per order)
73600
(80 X 920 per Part type)
97290
(470 X 207 per Board)
231800
(24400 X 9.5 per MHs)
Activity cost pool Estimated overhead cost (a) Expected activity (b) Activity rate (a) / (b) Labour related 686800 40,400 17 per DLH Purchase orders 44800 1600 28 per order Parts management 423200 460 920 per part type Board etching 438840 2120 207 per board General factory 771400 81200 9.5 per MHsRelated Questions
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