Matson Company manufactures automobile floor mats. It currently has 2 product lines, the Standard and the Deluxe.

Matson Company manufactures automobile floor mats. It currently has 2 product lines, the Standard and the Deluxe.

Matson has a total of $25,640 in overhead. It currently used a traditional cost system with overhead applied to the product on the basis of either direct labor (DL) hours or machine hours. Matson has compiled the following information about possible cost drivers and its two product lines.

 

Matson Company Total	Quantity/Amount Consumed by Standard Floor Mat Line	Quantity/Amount Consumed by Deluxe Floor Mat Line
1,010 DL hours	570 DL hours	440 DL hours
6,980 machine hours	2,950 machine hours	4,030 machine hours

 

Requirement 1:

Suppose Matson used a traditional costing system with direct labor hours as the cost driver. Determine the amount of overhead assigned to each product line. (Round activity rates and final answers to 2 decimal places. Omit the "$" sign in your response.)

 

	Overhead assigned
Standard Floor Mat	$ 14,470.10
Deluxe Floor Mat	$ 11,169.90

 

Requirement 2:

Suppose Matson used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Round activity rates to 4 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)

 

	Overhead assigned
Standard Floor Mat	$ 10,836.39
Deluxe Floor Mat	$ 14,803.61

Explanation:

1:

$25,640 / 1,010 labor hrs = $25.39/LH

Standard Floor Mat:  570 × $25.39 = $14,472.30

Deluxe Floor Mat:     440 × $25.39 = $11,171.60

2:

$25,640 / 6,980 machine hrs = $3.6734/MH

Standard Floor Mat:  2,950 × $3.6734 = $10,836.53

Deluxe Floor Mat:  4,030 × $3.6734 = $14,803.80