FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
Req 1
Cost Driver
Number of moves
Number of inspections
Number of machine hours
Req 2 and 3
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.
Material Handling
Quality Control
Machine maintenance
Cost Assigned
to Pool
Activity Rate
$ 2,068.00
$ 8,640.00
$ 14,120.00
Calculate the activity rates for each activity pool assuming Schell uses an ABC system.
Note: Round your answers to 2 decimal places.
per Material Move
per Inspection
per Machine Hour
Req 1
Quantity or Amount
Consumed by Standard
Floor Mat Line
38 moves
500 inspections
3,000 machine hours
Req 2 and 3>
Quantity or Amount Consumed
by Deluxe Floor Mat Line
56 moves
850 inspections
4,060 machine hours
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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: Activity Pools Material handling Quality control Machine maintenance Req 1 Cost Driver Number of moves Number of inspections Number of machine hours Req 2 and 3 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. Material Handling Quality Control Machine maintenance Cost Assigned to Pool Activity Rate $ 2,068.00 $ 8,640.00 $ 14,120.00 Calculate the activity rates for each activity pool assuming Schell uses an ABC system. Note: Round your answers to 2 decimal places. per Material Move per Inspection per Machine Hour Req 1 Quantity or Amount Consumed by Standard Floor Mat Line 38 moves 500 inspections 3,000 machine hours Req 2 and 3> Quantity or Amount Consumed by Deluxe Floor Mat Line 56 moves 850 inspections 4,060 machine hours
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