Question

er 04 Pre-Built Problems Saved Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor Carlise has total overhead of $138.986. Carlise has identified the following information about its overhead activity cost pools and the two product lines Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Cost Assigned to Pool $ 20,176 $81,400 $37,410 Quantity/Amount Quantity/Amount consumed by Indoor Consumed by Outdoor Line Line 600 moves 440 moves 5,900 inspections 5, 100 inspections 28,000 machine hours 15,000 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.) Overhead Assigned 81,400 Indoor Model Outdoor Model Total 81.400 2. Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.

Answer 1

Under Traditional Costing, Overheads are assigned based on the Predetermined overhead rate

Predetermined Overhead rate = Total Overhead Cost/ Machine hours

Per hour overhead rate is then multiplied with the hours in the respective product lines.

Please go through the following attachment for solution.

Question 2: Activity Proportions Question 1: Traditional Costing Activity Proportions Outdoor Line Overhead Assigned Indoor Line Note 1 90,503 3.232233*28000 48,483 3.232233*15000 Materials Handling Quality Control Machine Maintenance 42.31 % Per Move 46.36 % Per Inspection 34.88 % Per Machine hour Note 4 Note 2 Indoor Model 57.69 % 53.64 % 65.12 % Note 3 Outdoor Model Note 1 440*100/(600+440) 5100*100/(5900+5100) |15000*100/(28000+15000) 20176+81400+37410 Note 2 Note 3 600*100/(600+440) 5900*100/(5900+5100) 28000*100/(28000+15000) Total Overheads = A 138986 Total Machine Hours =B 43000 28000+15000 Cost per Machine Hour =A/B 3.232232558 Note 4 Question 3: Indoor Line Indoor Line Calculations Materials Handling 11639.53 20176*57.69 Quality Control 43662.96 81400*53.64 24361.39 37410*65.12 Machine Maintenance Total Overhead Assigned 79664