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: Cost Assigned to Pool $ 3,000.00 $ 8,820.00 $ 12,257.00 Quantity or Amount Consumed by Standard Floor Mat Line 42 moves 560 inspections 2,990 machine hours Activity Pools Material handling Quality control Machine maintenance Required: Cost Driver Number of moves Number of inspections Number of machine hours 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. Quantity or Amount Consumed by Deluxe Floor Mat Line 58 moves 700 inspections 4,220 machine hours Req 1 Req 2 and 3 Calculate the activity rates for each activity pool assuming Schell uses an ABC system. Note: Round your answers to 2 decimal places. Material Handling Quality Control Machine maintenance Activity Rate per Material Move per Inspection per Machine Hour
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: Cost Assigned to Pool $ 3,000.00 $ 8,820.00 $ 12,257.00 Quantity or Amount Consumed by Standard Floor Mat Line 42 moves 560 inspections 2,990 machine hours Activity Pools Material handling Quality control Machine maintenance Required: Cost Driver Number of moves Number of inspections Number of machine hours 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. Quantity or Amount Consumed by Deluxe Floor Mat Line 58 moves 700 inspections 4,220 machine hours Req 1 Req 2 and 3 Calculate the activity rates for each activity pool assuming Schell uses an ABC system. Note: Round your answers to 2 decimal places. Material Handling Quality Control Machine maintenance Activity Rate per Material Move per Inspection per Machine Hour
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text: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:
Cost Assigned
to Pool
$ 3,000.00
$ 8,820.00
$ 12,257.00
Quantity or Amount
Consumed by Standard
Floor Mat Line
42 moves
560 inspections
2,990 machine hours
Activity Pools
Material handling
Quality control
Machine maintenance
Required:
Cost Driver
Number of moves
Number of inspections
Number of machine hours
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.
Quantity or Amount Consumed
by Deluxe Floor Mat Line
58 moves
700 inspections
4,220 machine hours
*Req 1
Req 2 and 3
Calculate the activity rates for each activity pool assuming Schell uses an ABC system.
Note: Round your answers to 2 decimal places.
Material Handling
Quality Control
Machine maintenance
Activity Rate
per Material Move
per Inspection
per Machine Hour
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