Carlise has identified the following information about its overhead activity pools and the two product lines: Cost Assigned Quantity or Amount Consumed by to Pool Indoor Line $ 20,910 $ 85,120 $ 34,790 Activity Pools Materials handling Quality control Machine maintenance Complete this question by entering your answers in the tabs below. Outdoor Model Cost Driver Number of moves Number of inspections Number of 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. 2. Calculate the activity proportions for each activity pool in Carlise's ABC system. 3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system. 4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. 5. Compare the results for a traditional system with an ABC system. Which do you think is more accurate? Materials Handling Quality Control Required 1 Required 2 Required 3 Required 4 Required 5 Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. Note: Round your intermediate calculations to 2 decimal places and round your final answers to the nearest whole dollar amount. Maintenance Total Overhead Assigned 570 moves 6,100 inspections 28,000 machine hours < Required 3 Quantity or Amount Consumed by Outdoor Line Required 5 > 450 moves 5,100 inspections 21,000 machine hours
Carlise has identified the following information about its overhead activity pools and the two product lines: Cost Assigned Quantity or Amount Consumed by to Pool Indoor Line $ 20,910 $ 85,120 $ 34,790 Activity Pools Materials handling Quality control Machine maintenance Complete this question by entering your answers in the tabs below. Outdoor Model Cost Driver Number of moves Number of inspections Number of 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. 2. Calculate the activity proportions for each activity pool in Carlise's ABC system. 3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system. 4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. 5. Compare the results for a traditional system with an ABC system. Which do you think is more accurate? Materials Handling Quality Control Required 1 Required 2 Required 3 Required 4 Required 5 Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. Note: Round your intermediate calculations to 2 decimal places and round your final answers to the nearest whole dollar amount. Maintenance Total Overhead Assigned 570 moves 6,100 inspections 28,000 machine hours < Required 3 Quantity or Amount Consumed by Outdoor Line Required 5 > 450 moves 5,100 inspections 21,000 machine hours
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter5: Activity-based Costing And Management
Section: Chapter Questions
Problem 4MCQ: Use the following information for Multiple-Choice Questions 5-3 and 5-4: Consider the information...
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Carlise has identified the following information about its overhead activity pools and the two product lines:
Cost Assigned Quantity or Amount Consumed by
to Pool
Indoor Line
$ 20,910
$ 85,120
$ 34,790
Activity Pools
Materials handling
Quality control
Machine maintenance
Complete this question by entering your answers in the tabs below.
Cost Driver
Number of moves
Number of inspections
Number of 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.
Outdoor Model
2. Calculate the activity proportions for each activity pool in Carlise's ABC system.
3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system.
4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system.
5. Compare the results for a traditional system with an ABC system. Which do you think is more accurate?
Materials Handling
Quality Control
Required 1 Required 2 Required 3 Required 4 Required 5
Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system.
Note: Round your intermediate calculations to 2 decimal places and round your final answers to the nearest whole
dollar amount.
Maintenance
Total Overhead Assigned
570 moves
6,100 inspections
28,000 machine hours
Quantity or Amount Consumed by
Outdoor Line
< Required 3
Required 5 >
450 moves
5,100 inspections
21,000 machine hours
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