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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 $ 2,178.00 49 moves 50 moves
Quality control Number of inspections $ 8,763.00 570 inspections 700 inspections
Machine maintenance Number of machine hours $ 14,805.00 2,940 machine hours 4,110 machine hours

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.
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