Question

Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $120,650. 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 Quantity/Amount Quantity/Amount Assigned Consumed by Indoor Consumed by Outdoor to Pool Line Line $ 19,760 590 moves 450 moves $73,9205,700 inspections 5,500 inspections $ 26,970 27,000 machine hours 4,000 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 Indoor Model Outdoor Model Total

Answer 1

1.

total machine hours(27000+4000)(A)	$                31,000.00
total overhead(B)	$              120,650.00
rate per machine hour(B/A)	$                           3.89

	overhead assigned
indoor model(3.89*27000)	$                    105,082
outdoor model(3.89*4000)	$                      15,568
total	$                    120,650

2.

activity proportions
	Indoor Line(%)	Outdoor line(%)
material handling	56.73	43.27	per move
	(590/(590+450)*100)	(450/(590+450)*100)
Quality Control	50.89	49.11	per inspection
	(5700/(5700+5500)*100)	(5500/(5700+5500)*100)
Machine Maintenance	87.10	12.90	per machine hour
	(27000/(27000+4000)*100)	(4000/(27000+4000)*100)

3.

indoor model
material handling	$                                                     11,210.00
	(19760/(590+450))*590)
Quality Control	$                                                     37,620.00
	(73920/(5700+5500))*5700)
Machine Maintenance	$                                                     23,490.00
	(26970/(27000+4000))*27000)
TOTAL	$                                                     72,320.00

4.

OUTDOOR MODEL
material handling	$                                        8,550.00
	(19760/(590+450))*450)
Quality Control	$                                      36,300.00
	(73920/(5700+5500))*5500)
Machine Maintenance	$                                        3,480.00
	(26970/(27000+4000))*4000)
TOTAL	$                                      48,330.00