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 $142,860 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Cost Driver Cost Assigned Quantity or Amount to Pool Consumed by Basic Quantity or Amount Consumed by Luxury Number of moves Number of inspections $ 3,410 $ 28,350 21 moves 220 inspections machine 41 moves 110 inspections Machine maintenance Number of machine hours $ 111,100 5,200 hours 4,900 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 Luxury Model Overhead Assigned Overhead Assigned Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $142,860 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Cost Driver Cost Assigned Quantity or Amount to Pool Consumed by Basic Quantity or Amount Consumed by Luxury Number of moves Number of inspections $ 3,410 $ 28,350 21 moves 220 inspections machine 41 moves 110 inspections Machine maintenance Number of machine hours $ 111,100 5,200 hours 4,900 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 Luxury Model Overhead Assigned Overhead Assigned
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Required 1 Traditional Costing System In a traditional costing system overhead is allocated based on ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
Posted Date:
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