Bluefield Corp. has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost drivers:

Total overhead $71,400

Cost drivers

# of labor hours 1,600

# of machine hours 42,000

Suppose Bluefield Corp. uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 76 percent of the labor hours and Product B requires 24 percent. (Round your final answer to nearest whole dollar amount.)

Suppose Bluefield uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A consumes 16,100 machine hours and Product B consumes 25,900. (Round intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar amount.)

2. Bluefield has decided to use an ABC costing system and has identified the following detailed information about its cost pools and cost drivers:

Activity cost pools

Materials handling $61,360

Machine maintainence $15,500

Cost drivers

# of materials moves 520

# of machine hours 50,000

Calculate Bluefields activity rate for each cost pool. (Round your final answer for per material moves to nearest dollar amount and per machine hour to 4 decimal places.)

Determine the amount of overhead assigned to Bluefields products if each has the following activity demands: (Round intermediate calculations to 4 decimal places and your final answers to 2 decimal places.)

3. Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe.

Schell has a total of $26,740 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 quantity/amount consumed by standard floor mat line

1,080 labor hours 690 labors hours

7,130 machine hours 2,940 machine hours

quantity/amount consumed by deluxe floor mat line

390 labor hours

4190 machine hours

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 answers to 2 decimal places and final answers to 2 decimal places.)

Suppose Schell uses a traditional costing system with machine 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.)

4. Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Suppose that Schell has conducted further research into its overhead and potential cost drivers. As a result, the company has compiled the following detailed information, breaking total overhead into three cost pools:

Activity cost pools cost driver cost assigned to pool standard floor mat deluxe floor mat

Material handling # moves $3,267 43 moves 56 moves

Quality control # inspections $8,890 690 inspections 580 inspection

Machine maintenance # machine hrs $12,906 2,940 machine hrs 4230 machine hr

Calculate the activity rates for each cost pool assuming Schell uses an ABC system. (Round your answers to 2 decimal places.)

Calculate the amount of overhead that Schell will assign to the Standard floor mat line. (Round your intermediate calculations to 2 decimal places.)

Determine the amount of overhead Schell will assign to the Deluxe product line. (Round your intermediate calculations to 2 decimal places.)

5. Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow:

Fabric case 17,000 labors hours, 560 material moves, 35 setups

Leather case 11,000 labor hours, 1,040 material moves, 135 setups

Total estimated overhead costs are $249,800, of which $192,000 is assigned to the materials handling cost pool and $57,800 is assigned to the setup cost pool.

Calculate the overhead assigned to the fabric case using the traditional costing system based on direct labor hours. (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.)

Calculate the overhead assigned to the fabric case using ABC. (Round activity rates or activity proportions, and intermediate calculations to four decimal places.)

Was the fabric case over- or undercosted by the traditional cost system compared to ABC?

6. Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow:

Fabric case 18,000 labors hours, 660 material moves, 63 setups

Leather case 11,000 labor hours, 990 material moves, 117 setups

Total estimated overhead costs are $224,750, of which $198,000 is assigned to the materials handling cost pool and $36,000 is assigned to the setup cost pool.

Calculate the overhead assigned to the leather case line using the traditional costing system based on direct labor hours. (Do not round intermediate calculations.)

Calculate the overhead assigned to the leather case line using ABC.

Was the leather case over- or undercosted by the traditional cost system compared to ABC?