9 The company has identified the following information about its overhead activity pools and the two...

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9 The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Machine maintenance Required: Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned to Quantity or Amount Consumed Quantity or Amount Consumed Pool by Basic $ 14,000 20 moves $ 37,500 250 inspections $ 120,000 5,000 machine hours by Luxury 50 moves 125 inspections 5,000 machine hours 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? 9 The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Machine maintenance Required: Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned to Quantity or Amount Consumed Quantity or Amount Consumed Pool by Basic $ 14,000 20 moves $ 37,500 250 inspections $ 120,000 5,000 machine hours by Luxury 50 moves 125 inspections 5,000 machine hours 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?

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Answer Hazelnuts Overhead Costing Traditional vs ActivityBased Costing ABC 1 Traditional Costing with Machine Hours Traditional costing assumes overhe... View the full answer