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. 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
Cost Driver
Cost Assigned to Pool
Quantity or Amount Consumed by Standard Floor Mat Line
Quantity or Amount Consumed by Deluxe Floor Mat Line
Material handling
Number of moves
$ 1,767.00
31
moves
62
moves
Quality control
Number of inspections
$ 9,729.00
610
inspections
800
inspections
Machine maintenance
Number of machine hours
$ 10,785.00
3,000
machine hours
4,190
machine hours
Required:
Calculate the activity rates for each activity pool assuming Schell uses an ABC system.
Calculate the amount of overhead that Schell will assign to the Standard floor mat line.
Determine the amount of overhead Schell will assign to the Deluxe product line.
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