Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury....
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Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $175,378 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Basic Quantity/Amount Consumed by Luxury Cost Assigned to Pool $ 4,158 $ 25,620 $145,600 54 moves 100 inspections 5,300 machine hours Activity Cost Pools Materials handling Quality control Machine maintenance Basic Model Luxury Model Cost Driver Number of moves Number of inspections Number of 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. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Materials Handling Quality Control Machine Maintenance Overhead Assigned Overhead Assigned 2. Calculate the activity rates for each cost pool in Hazelnut's ABC system. (Round your answers to the nearest whole dollar.) 23 moves 200 inspections 5,100 machine hours Activity Rates per Move per Inspection per Machine Hour 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Basic Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Luxury Model Materials Handling Quality Control Machine maintenance Total Overhead Assigned 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? O Traditional System O ABC System Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $175,378 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Basic Quantity/Amount Consumed by Luxury Cost Assigned to Pool $ 4,158 $ 25,620 $145,600 54 moves 100 inspections 5,300 machine hours Activity Cost Pools Materials handling Quality control Machine maintenance Basic Model Luxury Model Cost Driver Number of moves Number of inspections Number of 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. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Materials Handling Quality Control Machine Maintenance Overhead Assigned Overhead Assigned 2. Calculate the activity rates for each cost pool in Hazelnut's ABC system. (Round your answers to the nearest whole dollar.) 23 moves 200 inspections 5,100 machine hours Activity Rates per Move per Inspection per Machine Hour 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Basic Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Luxury Model Materials Handling Quality Control Machine maintenance Total Overhead Assigned 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? O Traditional System O ABC System
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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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