Question - Larkspur Corp. manufactures bird feeders. It currently has two product lines, the standard and the deluxe. Larkspur has a total of $137,250 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
|
$3,500
|
20 moves
|
50 moves
|
|
Quality control
|
Number of inspections
|
$33,750
|
250 inspections
|
125 inspections
|
|
Machine
maintenance
|
Number of
machine hrs
|
$100,000
|
5,000 machine hours
|
5,000 machine hours
|
Suppose Larkspur used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.