dumbdumbkylee
14.04.2020 •
Business
Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Schell has a total of $39,060 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/Amount Consumed by Standard Floor Mat Line Quantity/Amount Consumed by Deluxe Floor Mat Line 600 labor hours 400 labor hours 200 labor hours 7,150 machine hours 4,150 machine hours 3,000 machine hours Required: 1. 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. 2. Suppose Schell uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead
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Ответ:
Instructions are below.
Explanation:
Giving the following information:
Schell has a total of $39,060 in overhead.
Direct labor hours:
Standard= 400
Deluxe= 200
Machine hours:
Standard= 4,150
Deluxe= 3,000
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
1) Direct labor hours as allocation rate
Estimated manufacturing overhead rate= 39,060/600= $65.1 per direct labor hour
Now, we can allocate to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Standard= 65.1*400= $26,040
Deluxe= 65.1*200= $13,020
2) Machine hour as allocation rate:
Estimated manufacturing overhead rate= 39,060/7,150= $5.46 per machine hour
Now, we can allocate to each product line:
Standard= 5.46* 4,150= $22,659
Deluxe= 5.46*3,000= $16,380
Ответ:
5feet