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