Question

Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Schell has a total of $25,240 in overhead. It currently uses a traditional cost system with overhead applied to the product on the basis of either labor hours or machine hours. Schell has compiled the following information about possible cost drivers and its two product lines: Schell Company Total 1,080 labor hours 7,210 machine hours Quantity/Amount Consumed by Standard Floor Mat Line 700 labor hours 3,020 machine hours Quantity/Amount Consumed by Deluxe Floor Mat Line 380 labor hours 4,190 machine hours Required: 1. Suppose Schell uses a traditional costing system with direct labor hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Suppose Schell uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose Schell uses a traditional costing system with direct labor hours as the cost driver. Determine the amount of overhead assigned to each product line. (Round activity rates to 4 decimal places and final answers to 2 decimal places.) Overhead Assigned Standard Floor Mat Deluxe Floor Mat

Answer 1

1
Activity rate	23.3704	=25240/1080
	Overhead assigned
Standard Floor mat	16359.28	=700*23.3704
Deluxe Floor mat	8880.75	=380*23.3704
2
Activity rate	3.5007	=25240/7210
	Overhead assigned
Standard Floor mat	10572.11	=3020*3.5007
Deluxe Floor mat	14667.93	=4190*3.5007