Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $143,955 in overhead.
The company has identified the following information about its
overhead activity cost pools and the two product lines:
Activity Cost Pools | Cost Driver | Cost Assigned to Pool |
Quantity/Amount Consumed by Basic |
Quantity/Amount Consumed by Luxury |
|||
Materials handling | Number of moves | $ | 3,510 | 22 moves | 43 moves | ||
Quality control | Number of inspections | $ | 27,145 | 220 inspections | 110 inspections | ||
Machine maintenance | Number of machine hours | $ | 113,300 | 5,600 machine hours | 4,700 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.)
2. Calculate the activity rates for each cost pool
in Hazelnut’s ABC system. (Round your answers to the
nearest whole dollar.)
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.)
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.)
5. Compare the results for a traditional system
with that of an ABC system. Which do you think is more
accurate?
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury....
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $132,398 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Cost Driver Cost Assigned to Pool Quantity/Amount Consumed by Basic Quantity/Amount Consumed by Luxury Materials handling Number of moves $ 3,498 30 moves 36 moves Quality control Number of inspections $ 27,900 220 inspections 110...
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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 $157,456 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Cost Assigned to Pool $ 3,596 $ 30,360 $123,500 Quantity/Amount Quantity/Amount Consumed by Consumed by Basic Luxury...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $152,638 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned to Pool $ 2,688 $ 29,050 $120,900 Quantity/Amount Consumed by Basic 14 moves 240 inspections...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $164,423 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Cost Assigned to Pool $ 3,328 $ 30,295 $130,800 Quantity/Amount Quantity/Amount Consumed by Consumed by Basic Luxury...
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