Reference no: EM13343348

Question:

Larkspur Corp. manufactures bird feeders. It currently has two product lines, the standard and the deluxe. Larkspur has a total of $184,060 in overhead.

The company has identified the following information about its overhead activity pools and the two product lines:

 

Activity Pools	Cost Driver	Cost Assigned to Pool				Quantity Consumed by Standard	Quantity Consumed by Deluxe
Material handling	Number of   moves		$	2,440		19 moves	42 moves
Quality control	Number of   inspections		$	33,120		190 inspections	155 inspections
Machine       maintenance	Number of  machine hrs		$	148,500		4,600 machine hours	5,300 machine hours

Requirement 1:
Suppose Larkspur used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.

Overhead assigned
Standard Model $
Deluxe Model $

Requirement 2:

Calculate the activity rates for each cost pool in Larkspur's ABC system.

Activity Rates
Material Handling $ per move
Quality Control $ per inspection
Maintenance $ per machine hour

Requirement 3:

Calculate the amount of overhead that Larkspur will assign to the standard line if it uses an ABC system.

Standard Model:
Material Handling $
Quality Control $
Maintenance $

Total Overhead Assigned $

Requirement 4:

Determine the amount of overhead Larkspur will assign to the deluxe line if it uses an ABC system. (Omit the "tiny_mce_markerquot; sign in your response.)

Deluxe Model:
Material Handling $
Quality Control $
Maintenance $

Total Overhead Assigned $