3.4 Connect: Cases and Problems Assignment
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CarliseCorpweek3.4mangementacct.docxCarlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $128,360. 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 |
|
$ |
21,000 |
|
580 moves |
470 moves |
|
Quality control |
Number of inspections |
|
$ |
76,650 |
|
5,500 inspections |
5,000 inspections |
|
Machine maintenance |
Number of machine hours |
|
$ |
30,710 |
|
29,000 machine hours |
8,000 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 |
$ |
2. Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.)
|
|
|
Activity Proportions |
|
|
|
Indoor Line |
Outdoor |
|
|
Materials Handling |
% |
% |
Per Move |
|
Quality Control |
% |
% |
Per Inspection |
|
Machine maintenance |
% |
% |
Per Machine Hour |
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.)
|
Indoor Model |
|
|
Materials Handling |
|
|
Quality Control |
|
|
Machine maintenance |
|
|
Total Overhead Assigned |
$ |
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.)
|
Outdoor Model |
|
|
Materials Handling |
|
|
Quality Control |
|
|
Machine maintenance |
|
|
Total Overhead Assigned |
$ |
5. Compare the results for a traditional system with an ABC system. Which do you think is more accurate?
Traditional System
ABC System
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and
the Outdoor. Carlise has total overhead of $128,360.
Carlise has identified the following information about its overhead activity cost pools and the
two produc
t 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
$
21,000
580 moves
470 moves
Quality
control
Number of
inspections
$
76,650
5,500
inspections
5,000
inspections
Machine
maintenance
Number of
machine
hours
$
30,710
29,000 machine
hours
8,000 machine
hours
Required:
1.
Suppose Carlise used a traditional costing system with machine hours as the cost driver.
De
termine 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
$
2.
Calculate
the
activ
i
ty
proportions
for
each
cost
pool
in
Carlise's
ABC
system
.
(Round
your
answers
to
2
decimal
places.)
Activity
Proportions
Indoor
Line
Outdoor
Materials
Handling
%
%
Per
Move
Quality
Cont
rol
%
%
Per
Inspection
Machine
maintenance
%
%
Per
Machine
Hour
3.
Calculate
the
amount
of
overhead
that
Carlise
will
assign
to
the
Indoor
line
if
it
uses
an
ABC
system.
(Round
your
int
ermediate
calculations
to
2
decimal
places
and
round
your
final
answers
to
the
nearest
whole
dollar
amount.)
Indoor
Model
Materials
Handling
Quality
Control
Machine
maintenance
Total
O
ver
head
Assigned
$
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and
the Outdoor. Carlise has total overhead of $128,360.
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 $ 21,000 580 moves 470 moves
Quality
control
Number of
inspections $ 76,650
5,500
inspections
5,000
inspections
Machine
maintenance
Number of
machine
hours $ 30,710
29,000 machine
hours
8,000 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 $
2. Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your
answers to 2 decimal places.)
Activity Proportions
Indoor Line Outdoor
Materials Handling % % Per Move
Quality Control % % Per Inspection
Machine maintenance % % Per Machine Hour
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.)
Indoor Model
Materials Handling
Quality Control
Machine maintenance
Total Overhead Assigned $
