Matson
Company manufactures automobile floor mats. It currently has 2 product lines,
the Standard and the Deluxe. Suppose that Matson 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 cost pools
|
Activity Pools
|
Cost
Driver
|
Cost
Assigned to Pool |
Quantity/Amount
Consumed by Standard Floor Mat Line |
Quantity/Amount
Consumed by Deluxe Floor Mat Line |
||||
Material Handling
|
# moves
|
$
|
2,376
|
46
moves
|
62
moves
|
|||
Quality Control
|
# inspections
|
$
|
9,100
|
700
inspections
|
700
inspections
|
|||
Machine Maintenance
|
# machine hrs
|
$
|
14,240
|
2,990
machine hours
|
4,130
machine hours
|
|||
Requirement 1:
|
||||||||
Calculate the activity rates for
each cost pool assuming Matson uses an ABC system. (Round
your answers to 2 decimal places. Omit the "$" sign in your
response.)
|
||||||||
Activity
rate
|
||||||
Material Handling
|
$
22
 |
per material move
|
||||
Quality Control
|
$
6.5
|
per inspection
|
||||
Maintenance
|
$
2
|
per machine hour
|
||||
Explanation:
Requirement 2:
|
||||||
Calculate
the amount of overhead that Matson will assign to the standard floor mat
line. (Round your intermediate calculations to 2
decimal places and final answers to the nearest whole dollar amount. Omit the
"$" sign in your response.)
|
||||||
Total overhead
assigned
|
$
11,542
|
Explanation:
Activity
Rate
|
Activity
Requirement
(Standard Mat) |
Total
Cost
Assigned |
||||
Materials Hand
|
$22
per move
|
46
moves
|
$
|
1,012
|
||
Quality Control
|
$6.5
per inspection
|
700
inspections
|
4,550
|
|||
Machine Maintenance
|
$2
per machine hour
|
2,990
machine hours
|
5,980
|
|||
Total
Cost Assigned
|
$
|
11,542
|
||||
Requirement 3:
|
Determine
the amount of overhead Matson will assign to the deluxe product line. (Round your intermediate calculations to 2 decimal places
and final answers to the nearest whole dollar amount. Omit the "$"
sign in your response.)
|
Total overhead
assigned
|
$
14,174
|
Explanation:
Activity
Rate
|
Activity
Requirement
(Deluxe Mat) |
Total
Cost
Assigned |
||||
Materials Hand
|
$22
per move
|
62
moves
|
$
|
1,364
|
||
Quality Control
|
$6.5
per inspection
|
700
inspections
|
4,550
|
|||
Machine Maintenance
|
$2
per machine hour
|
4,130
machine hours
|
8,260
|
|||
Total
Cost Assigned
|
$
|
14,174
|
||||
