· [1] as per traditional system
Basic Model |
$89429 |
Overhead assigned |
[$165360 x 5300 MHs / 9800 MHs] |
Luxury Model |
$75931 |
Overhead assigned |
[$165360 x 4500 MHs / 9800MHs] |
· [2]
Overhead cost |
Total actvity |
Activity rates |
||
Material Handling |
$3250 |
65 |
$50 |
per Move |
Quality Control |
$34710 |
300 |
$116 |
per Inspection |
Machine maintenance |
$127400 |
9,800 |
$13 |
per MHs |
· [3]
Basic |
||
Material Handling |
$750 |
(15moves x $ 50per Move) |
Quality Control |
$23,200 |
(200 inspections x $ 116 per Inspection) |
Machine maintenance |
$68,900 |
(5300 machine hours x $ 13per MHs) |
Total Overhead assigned |
$92850 |
· []4
Luxury |
||
Material Handling |
$2500 |
50 moves x $ 50per Move |
Quality Control |
$11600 |
100 inspections x $ 116. per Inspection |
Machine maintenance |
$58500 |
4500 machine hours x $ 13per MHs |
Total Overhead assigned |
$72600 |
5. As per Traditional cost system:-
Overhead cost assigned to basic line= $89429
And, Overhead cost assigned to luxury line = $ 75931
As per ABC system:-
Overhead cost assigned to basic line= $92850
And, Overhead cost assigned to luxury line = $ 72600
As from the above we can see:-
· that as per traditional cost system overhead are equally distributed, however in ABC system base line has higher overhead cost.
· Despite of having different inspection cost and different moves the cost are same in traditional cost system.
· Traditional cost system takes only one parameter and distribute the whole cost on single parameter. However it is not so in ABC system as it consider each and every parameter to distribute the costs.
Hence ABC system shows more accurate distribution of cost
Check my wor 3 Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $137,061 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Cost Quantity/Amount Quantity/Amount Assigned Consumed by Consumed by Activity Cost Pools Cost Driver to Pool Basic Luxury Materials handling Number of moves $ 2,666 10 moves 52 moves Quality control Number of inspections $ 31,395 240 inspections 120...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $139,714 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 Number of machine Machine maintenance hours Cost Assigned to Pool $ 4,004 $ 30,710 Quantity/Amount Consumed by Basic 22 moves 220 inspections Quantity/Amount...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $150,423 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 Quantity/Amount Quantity/Amount Assigned consumed by Consumed by to Pool Basic Luxury $ 4,503 25 moves 54...
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...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $162,164 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 $ 3,404 $ 32,660 $ 126,100 Quantity/Amount Consumed by Basic 12 moves 200...
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...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $174,765 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 $ 4,290 $ 31,875 $ 138,600 Quantity/Amount Consumed by Basic 24 moves 220...
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $147,638 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 $ 2,838 $ 26,000 $118,800 Quantity/Amount Quantity/Amount Consumed by Consumed by Basic Luxury...