Question

Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has total overhead of $139,400.
Carlise has identified the following information about its overhead activity cost pools and the two product lines:


Required:
1. Suppose Carlise used a traditional costing system with machine hours as the cost driver.
Determine the amount of overhead assigned to each product line.
2. Calculate the activity proportions for each cost pool in Carlise’s ABC system.
3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system.
4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system.
5. Compare the results for a traditional system with an ABC system. Which do you think is more accurate andwhy?


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  • CreatedFebruary 27, 2015
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