Carlton's Kitchen's three cost pools and overhead estimates are as follows: Activity Cost Pool Cost Driver Estimated Overhead Use per Product A Use per Product B Machine Setups Setups $162,000 5,000 4,000 Assembly Number of Parts 68,000 24,000 44,000 Machine Maintenance Machine Hours 150,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign. Product A Product B Total Overhead (ABC) $fill in the blank 1 $fill in the blank 2 Total overhead (traditional) fill in the blank 3 fill in the blank 4 Difference $fill in the blank 5 $fill in the blank 6
Carlton's Kitchen's three cost pools and overhead estimates are as follows: Activity Cost Pool Cost Driver Estimated Overhead Use per Product A Use per Product B Machine Setups Setups $162,000 5,000 4,000 Assembly Number of Parts 68,000 24,000 44,000 Machine Maintenance Machine Hours 150,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign. Product A Product B Total Overhead (ABC) $fill in the blank 1 $fill in the blank 2 Total overhead (traditional) fill in the blank 3 fill in the blank 4 Difference $fill in the blank 5 $fill in the blank 6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carlton's Kitchen's three cost pools and
| Activity Cost Pool | Cost Driver | Estimated Overhead |
Use per Product A |
Use per Product B |
| Machine Setups | Setups | $162,000 | 5,000 | 4,000 |
| Assembly | Number of Parts | 68,000 | 24,000 | 44,000 |
| Machine Maintenance | Machine Hours | 150,000 | 13,000 | 37,000 |
Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
| Product A | Product B | ||
| Total Overhead (ABC) | $fill in the blank 1 | $fill in the blank 2 | |
| Total overhead (traditional) | fill in the blank 3 | fill in the blank 4 | |
| Difference | $fill in the blank 5 | $fill in the blank 6 |
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