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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
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Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $131,468. |
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Carlise has identified the following information about its overhead activity cost pools and the two product lines: |
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| Activity Cost Pools | Cost Driver | Cost Assigned to Pool |
Quantity/Amount Consumed by Indoor Line |
Quantity/Amount Consumed by Outdoor Line |
|||
| Materials handling | Number of moves |
 | $ | 19,688 |  | 580 moves | 470 moves |
| Quality control | Number of inspections | Â | $ | 75,260 | Â | 6,300 inspections | 4,300 inspections |
| Machine maintenance | Number of machine hours |
 | $ | 36,520 |  | 25,000 machine hours | 19,000 machine hours |
| Â | |||||||
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| Required: | |
| 1. |
Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) |
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| 2. |
Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.) |
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| 3. |
Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system.(Round your intermediate calculations to 2 decimal places and round your final answers to the nearest whole dollar amount.) |
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| 4. |
Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system.(Round your intermediate calculations to 2 decimal places and round your final answers to the nearest whole dollar amount.) |
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| 1) | Â | Â | Â | Â | Â | Â | Â | Â | Â |
| Total Overhead | 131,468.00 | Â | Â | Â | Â | Â | Â | Â | Â |
| Total Machine hrs(25,000+19,000) | 44,000.00 | Â | Â | Â | Â | Â | Â | Â | Â |
| Overhead Rate(131,468/44,000) | 2.99 | Â | Â | Â | Â | Â | Â | Â | Â |
| Overhead Assigned to Indoor Line(25000*2.99) | 74,697.73 | Â | Â | Â | Â | Â | Â | Â | Â |
| Overhead Assigned to Outdoor Line(19000*2.99) | 56,770.27 | Â | Â | Â | Â | Â | Â | Â | Â |
| 2),3,4 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
| Activity Cost Pools | Cost driver | Cost Assigned to pool | Quantity/Amount consumed by Indoor Line | Quantity/Amount consumed by Outdoor Line | Total Drivers | Cost per Activity driver | Overhead cost for indoor Line base on ABC | Overhead cost for Outdoor Line base on ABC | Â |
| Materials Handling | No of Moves | 19,688.00 | 580 Moves | 470 Moves | 1,050.00 | 18.75 | 10,875.28 | 8,812.72 | Â |
| Quality control | No of Inspections | 75,260.00 | 6,300 Inspections | 4,300 Inspections | 10,600.00 | 7.10 | 44,730.00 | 30,530.00 | Â |
| Machine Maintenance | No of Machine hours | 36,520.00 | 25,000 Machine hrs | 19,000 Machine hrs | 44,000.00 | 0.83 | 20,750.00 | 15,770.00 | Â |
| Â | Â | 131,468.00 | Â | Â | Â | Â | 76,355.28 | 55,112.72 | Â |
| Â | Â | Â | Â | Â | Â |
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