Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and...
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Accounting
Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe.
Schell has a total of $26,140 in overhead. It currently uses a traditional cost system with overhead applied to the product on the basis of either labor hours or machine hours. Schell has compiled the following information about possible cost drivers and its two product lines:
Schell Company Total
Quantity or Amount Consumed by Standard Floor Mat Line
Quantity or Amount Consumed by Deluxe Floor Mat Line
950
labor hours
570
labor hours
380
labor hours
7,170
machine hours
3,040
machine hours
4,130
machine hours
Required:
Suppose Schell uses a traditional costing system with direct labor hours as the cost driver. Determine the amount of overhead assigned to each product line.
Suppose Schell uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.
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