Carlise has identified the following information about its overhead activity pools and the two product...

80.2K

Verified Solution

Question

Accounting

Carlise has identified the following information about its overhead activity pools and the two product lines:

Activity Pools Cost Driver Cost Assigned to Pool Quantity or Amount Consumed by Indoor Line Quantity or Amount Consumed by Outdoor Line

Materials handling Number of moves $ 20,090 610 moves 370 moves

Quality control Number of inspections $ 75,920 6,200 inspections 4,200 inspections

Machine maintenance Number of machine hours $ 28,700 27,000 machine hours 14,000 machine hours

Activity Pools	Cost Driver	Cost Assigned to Pool	Quantity or Amount Consumed by Indoor Line	Quantity or Amount Consumed by Outdoor Line
Materials handling	Number of moves	$ 20,090	610	moves	370	moves
Quality control	Number of inspections	$ 75,920	6,200	inspections	4,200	inspections
Machine maintenance	Number of machine hours	$ 28,700	27,000	machine hours	14,000	machine hours

Required:

Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.

Calculate the activity proportions for each activity pool in Carlises ABC system.

Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system.

Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system.

Compare the results for a traditional system with an ABC system. Which do you think is more accurate?

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member