Bonita Toys & Games, Inc. manufactures specialty toys. Bonita uses a traditional product costing system to assign overhead costs uniformly to all products. To meet industry safety standards and to assure its customers of safe and durable toys, Bonita assigns its quality control overhead costs to all products at a rate of 21% of direct labor costs. Its direct labor cost for the month of August for its toddler line of toys is $309,000. In response to repeated requests from its financial vice president, Bonita's management agrees to adopt activity-based costing, Data relating to the toddler line of toys for the month of August are as follows: Overhead Rate Cost Drivers Number of Cost Drivers Used per Activity 42.000 pounds 159,000 toys Activity Cost Pools Materials Inspection Assembly Line Inspection National Toy Association Certification $0.60 per pound Number of pounds Number of finished toys $0.14 per toy Retail orders $2.00 per order 700 orders Toy Association Certification Retail orders $2.00 per order 700 orders our answer is correct. the quality control overhead cost to be assigned to the toddler toy line for the month of August (1) using the al product costing system (direct labor is the cost driver), and (2) using activity-based costing. Quality Control Overhead Cost al costing 64890 -based costing 48860 ook and Media Attempts: 1 of 3 used (b) Your answer is partially correct. By what amount does the traditional product costing system under-cost or over-cost the toddler toy line? The traditional product costing system overcosts overhead by $ 2940 e Textbook and Media Attempts: 1 of 3 used Submit Answer Save for Later Using multiple attempts will impact your score. 5% score reduction after attempt 2 Bonita Toys & Games, Inc. manufactures specialty toys. Bonita uses a traditional product costing system to assign overhead costs uniformly to all products. To meet industry safety standards and to assure its customers of safe and durable toys, Bonita assigns its quality control overhead costs to all products at a rate of 21% of direct labor costs. Its direct labor cost for the month of August for its toddler line of toys is $309,000. In response to repeated requests from its financial vice president, Bonita's management agrees to adopt activity-based costing, Data relating to the toddler line of toys for the month of August are as follows: Overhead Rate Cost Drivers Number of Cost Drivers Used per Activity 42.000 pounds 159,000 toys Activity Cost Pools Materials Inspection Assembly Line Inspection National Toy Association Certification $0.60 per pound Number of pounds Number of finished toys $0.14 per toy Retail orders $2.00 per order 700 orders Toy Association Certification Retail orders $2.00 per order 700 orders our answer is correct. the quality control overhead cost to be assigned to the toddler toy line for the month of August (1) using the al product costing system (direct labor is the cost driver), and (2) using activity-based costing. Quality Control Overhead Cost al costing 64890 -based costing 48860 ook and Media Attempts: 1 of 3 used (b) Your answer is partially correct. By what amount does the traditional product costing system under-cost or over-cost the toddler toy line? The traditional product costing system overcosts overhead by $ 2940 e Textbook and Media Attempts: 1 of 3 used Submit Answer Save for Later Using multiple attempts will impact your score. 5% score reduction after attempt 2
