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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 $130,794. Carlise has identified
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $130,794. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned Quantity/Amount Consumed Quantity/Amount Consumed to Pool by Indoor Line by Outdoor Line $ 18,624 570 moves 400 moves $ 87,010 5,600 inspections 5,700 inspections $ 25,160 20,000 machine hours 14,000 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.) Indoor Line Materials Handling Activity Proportions Outdoor Line % % % Quality Control Machine maintenance per Move per Inspection 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
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