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 $143,835 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 Number of moves to Pool $ 4,235 Number of inspections $ 29,600 Cost Assigned Amount Consumed Quantity or Quantity or Amount by Basic 20 moves 220 inspections machine 1 Machine maintenance Number of machine hours $ 110,000 5,800 hours 5,2 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 Calculate the activity rates for each activity pool in Hazelnut's ABC system. Note: Round your answers to the nearest whole dollar. Materials Handling Activity Rates per Move Quality Control per Inspection Machine Maintenance per Machine Hour < Required 1 Required 3 > Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $143,835 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 Number of moves to Pool $ 4,235 Number of inspections $ 29,600 Cost Assigned Amount Consumed Quantity or Quantity or Amount by Basic 20 moves 220 inspections machine 1 Machine maintenance Number of machine hours $ 110,000 5,800 hours 5,2 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 Calculate the activity rates for each activity pool in Hazelnut's ABC system. Note: Round your answers to the nearest whole dollar. Materials Handling Activity Rates per Move Quality Control per Inspection Machine Maintenance per Machine Hour < Required 1 Required 3 >
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