Question

Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $147,636. Carlise has identified the following information about its overhead activity cost pools and the two product lines: 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 $ 17,856 640 moves 290 moves Quality control Number of inspections $ 96,600 5,700 inspections 5,800 inspections Machine maintenance Number of machine hours $ 33,180 30,000 machine hours 12,000 machine hours 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.) 2. Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.) 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.) 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.)

Answer 1

Answer :

(1)

	Overhead Assigned
Indoor line ( $ 147636* 30000/ 42000)	$ 105454
Outdoor line ( $ 147136*12000/42000)	$ 42182
Total	$ 147636

(2)  activity proportions

	Indoor line	Outdoor line
Material handling	68.82 % ( 640*100/930)	31.18 % ( 290*100/930)
Quality control	49.57 % ( 5700*100/ 11500)	50.43 % ( 5800*100/ 11500)
Maintenance	71.43 % ( 30000*100/42000)	28.57 % ( 12000*100/42000)

(3)

Indoor Line
Material handling	$ 12288
Quality control	$ 47885
Maintenance	$ 23700
Total overhead Assigned	$ 83873

(4)

Outdoor Line
Material handling	$ 5568
Quality control	$ 48715
Maintenance	$ 9480
Total overhead Assigned	$ 63763