Carlise Corp., which manufactures ceiling fans, currently has two product lines,
ID: 2427852 • Letter: C
Question
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $136,612.
Carlise has identified the following information about its overhead activity cost pools and the two product lines:
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.)
Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.)
Indoor Line
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.)
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.)
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $136,612.
Carlise has identified the following information about its overhead activity cost pools and the two product lines:
Explanation / Answer
Answer 1. Overhead Assigned Under Traditional Costing Macine Hours Ovehead Assigned Indoor Model 22000 63,946 ($136612/47000 Hrs) X 22000 Hrs Outdoor Model 25000 72,666 ($136612/47000 Hrs) X 25000 Hrs Total 47000 136,612 Answer 2. Activity Proportions for each Cost Pool As per ABC System Indoor Line Oudoor Line Qty In % Qty In % Material Handling 560 56.57% 430 43.43% Per Move (560/990 X 100) (430/990 X 100) Quality Control 6000 54.05% 5100 45.95% per Inspection (6000/11100 X 100) (5100/11100 X 100) Maintenance 22000 46.81% 25000 53.91% Per Machine hour (22000/47000 X 100) (2500/47000 X 100) Answer 3. Overhead Applied to Indoor Model Total Overhead Overhead Applied Material Handling $18,661 10,555.72 ($18661 X 56.57%) Quality Control $76,590 41,400.00 ($76590 X 54.05%) Maintenance $41,360 19,360.00 ($41360 X 46.81%) Total $136,611 $71,316 Answer 4. Overhead Applied to Outdoor Model Total Overhead Overhead Applied Material Handling $18,661 8,105.28 ($18661 X 43.43%) Quality Control $76,590 35,190.00 ($76590 X 45.95%) Maintenance $41,360 22,000.00 ($41360 X 53.91%) Total $136,611 $65,295