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Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $137,074. Carlise has identified
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $137,074. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Cost Quantity/Amount Assigned Quantity/Amount Consumed by Outdoor Activity Cost Pools Cost Driver to Pool Consumed by Indoor Line Line Materials handling Number of moves $ 21,614 656 moves 426 moves Quality control Number of inspections :6 87,746 6,106 inspections 4,666 inspections Machine maintenance Number of machine hours :3 27,726 29,666 machine hours 4,606 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.) Indoor Model Outdoor Model 2. Calculate the activity proportions for each cost pool in Carlise's ABC system. (Round your answers to 2 decimal places.) 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.) 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.) 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? 0 Traditional System 0 ABC System
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