Reference no: EM13566312

Adria 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: Labor-related. Activity Measure: Direct labor-hours.Expected Overhead Cost: $35,000.Expected activity: 7,000 DLHs. Activity Cost Pool: Purchase orders. Activity Measure: Number of orders . Expected Overhead Cost: $4,000 ...Expected activity: 2,000 orders. Activity Cost Pool: Material receipts. Activity Measure: Number of receipts ... Expected Overhead Cost: $10,450 .... Expected Activity: 950 receipts. Activity Cost Pool: Relay assembly .... Activity Measure: Number of relays . Expected Overhead Cost: $7,000 .... Expected activity: 1,000 relays .... Activity Cost Pool: General factory .... Activity Measure: Machine-hours .... Expected Overhead Cost: $240,000 .... Expected activity: 40,000 MHs 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: Labor-related (DLHs) ... Expected Activity: Product A 2,400 Product B 500 Product C 3,500 Porduct D 600 .....Activity Cost pool: Production orders (orders) ...Expected activity: Product A 100, Product B 350 Product C 800 Product D 750 ....Activity Cost pool: Materials receipts (receipts) ... Expected activity: Product A 400, Product B 208 Prodcut C 342 Product D 0 .... Activity Cost pool: Relay assembly (relays) ... Expected activity: Product A 170, Product B 170, Product C 300, Product D 360 .... Activity Cost pool: Genertal factory (MHs) .... Expected activity: Product A 12,000 Product B 7000 Product C 8,000 Product D 13,000 .... Using the ABC data, determine thte toal amount of overhead cost assigned to each product. 3. Assume that prior to implementing ABC, Adria used a conventional cost system that applied all manufacturing overhead to products based on machine-hours. Explain how the conventional cost assignments would differ from the activity-based cost assignments with respect to Product C.