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 activity pools: Activity Pools Material handling Quality control Machine maintenance Reg 1 Cost Driver Number of moves Number of inspections Number of machine hours Reg 2 and 31 Cost Assigned Quantity or Amount Consumed to Pool by Standard Floor Mat Line $3,267.00 $ 5,875.00 $ 13,509.00 Required: 1. Calculate the activity rates for each activity pool assuming Schell uses an ABC system. 2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line. 3. Determine the amount of overhead Schell will assign to the Deluxe product line Complete this question by entering your answers in the tabs below. 45 moves 670 inspections 2,990 machine hours Quantity or Amount Consumed by Deluxe Floor Mat Line 51 moves 500 inspections 4,120 machine hours

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 activity pools: Activity Pools Material handling Quality control Machine maintenance Reg 1 Cost Driver Number of moves Number of inspections Number of machine hours Reg 2 and 31 Cost Assigned Quantity or Amount Consumed to Pool by Standard Floor Mat Line $3,267.00 $ 5,875.00 $ 13,509.00 Required: 1. Calculate the activity rates for each activity pool assuming Schell uses an ABC system. 2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line. 3. Determine the amount of overhead Schell will assign to the Deluxe product line Complete this question by entering your answers in the tabs below. 45 moves 670 inspections 2,990 machine hours Quantity or Amount Consumed by Deluxe Floor Mat Line 51 moves 500 inspections 4,120 machine hours

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 2MAD: Alvarez Manufacturing Inc. is a job shop. The management of Alvarez Manufacturing Inc. uses the cost...

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Fellar Corporation has identified the following information: Activity pools Materials handling Machine maintenance Cost drivers Number of material moves Number of machine hours $ 40,320 $ 32,400 Number of material moves Number of machine hours 720 81,000 Required: 1. Calculate the activity rate for each activity pool. 2. Determine the amount of overhead assigned to Fellar's products if they have the following activity demands: Product A 550 41,500 Product B 170 39,500 3. Using activity proportions, determine the amount of overhead assigned to Fellar's products.
Carlise has identified the following information about its overhead activity pools and the two product lines: Cost Assigned to Pool $ 20,910 $ 85,120 $ 34,790 Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Quantity or Amount Consumed by Quantity or Amount Consumed by Indoor Line Outdoor Line Complete this question by entering your answers in the tabs below. Indoor Model Outdoor Model Total 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. 2. Calculate the activity proportions for each activity pool in Carlise's ABC system. 3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system. 4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. 5. Compare the results for a traditional system…
Rex Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity.
Rocks Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity.
Larsen, Inc., produces two types of electronic parts and has provided the following data: There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plantwide rate? Which product is undercosted? 3. What if the machine hours were used for the plantwide rate? Would this remove the cost distortion of a plantwide rate?
The management of Wheeler Company has decided to develop cost formulas for its major overhead activities. Wheeler uses a highly automated manufacturing process, and power costs are a significant manufacturing cost. Cost analysts have decided that power costs are mixed; thus, they must be broken into their fixed and variable elements so that the cost behavior of the power usage activity can be properly described. Machine hours have been selected as the activity driver for power costs. The following data for the past eight quarters have been collected: Required: 1. Prepare a scattergraph by plotting power costs against machine hours. Does the scatter-graph show a linear relationship between machine hours and power cost? 2. Using the high and low points, compute a power cost formula. 3. Use the method of least squares to compute a power cost formula. Evaluate the coefficient of determination. 4. Rerun the regression and drop the point (20,000; 26,000) as an outlier. Compare the results from this regression to those for the regression in Requirement 3. Which is better?
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Carlise has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned to Pool Indoor Model $ 20,910 $ 85,120 $ 34,790 Materials Handling Quality Control Machine Maintenance Total Overhead Assigned Quantity or Amount Consumed by Quantity or Amount Consumed by Indoor Line Outdoor Line 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. Complete this question by entering your answers in the tabs below. 2. Calculate the activity proportions for each activity pool in Carlise's ABC system. 3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system. 4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC…
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