Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury....
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Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $168,248 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Cost Assigned Amount Consumed Activity Pools Materials handling Quality control Cost Driver to Pool Number of moves Number of inspections $ 3,723 $ 33,725 by Basic 22 moves 200 inspections Quantity or Amount Consumed by Luxury 51 moves 100 inspections machine Machine maintenance Number of machine hours $ 130,800 5,500 hours 5,400 machine hours Required: 1. Suppose Hazelnut 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 rates for each activity pool in Hazelnut's ABC system. 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Basic Model Overhead Assigned Luxury Model Overhead Assigned Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $168,248 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Cost Assigned Amount Consumed Activity Pools Materials handling Quality control Cost Driver to Pool Number of moves Number of inspections $ 3,723 $ 33,725 by Basic 22 moves 200 inspections Quantity or Amount Consumed by Luxury 51 moves 100 inspections machine Machine maintenance Number of machine hours $ 130,800 5,500 hours 5,400 machine hours Required: 1. Suppose Hazelnut 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 rates for each activity pool in Hazelnut's ABC system. 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Basic Model Overhead Assigned Luxury Model Overhead Assigned
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Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
Posted Date:
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