Exercise 17-11 Health R Us, Inc., uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products. To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Health 'R Us engages in a high level of quality control. Health 'R Us assigns its quality-control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70,000. In response to repeated requests from its f a cal vice president, Health R Us's management agrees to adopt activity-based costing. Data relating to the low-calorie breakfast line for the month of June are as follows Overhead Rate Number of Cost Drivers Activity Cost Pools Cost Drivers Number of pounds Number of servings Customer orders $12.00 per order Used per Activity Inspections of material received In-process inspections FDA certification $0.90 per pound ,500 pounds $0.33 per serving9,600 servings 470 orders Compute the quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June (1) using the traditional product costing system (direct labor cost is the cost driver), and (2) using activity-based costing Traditional product costing Activity-based costing Quality-control overhead cost to be assigned By what amount does the traditional product costing system undercost or overcost the low-calorie breakfast line? Classify each of the activities as value-added or non-value-added. Activites Inspections of material received tn-process inspections G Search or type URL ency E Best Buy Credit C..B.B.A. in Risk Man. Degrees & Maiors htt/www.willy.( Connect - Class Dashboard 1 K.. Myab Statistics S Kimmel, Accounting, 6e PRIN. OF ACCT I&II (ACCT 2101& 2102) TOR STANDARD VIE EW PRINTER VERSTON BACK Inspections of material received Number of pounds $0.90 per pound -process inspections FDA certification 5,500 pounds 9,600 servings 470 orders Number of servings $0.33 per serving $12.00 per order Customer orders Comoute the quality control overhead cost to be driver), and (2) using activity-based costing assigned to the low-calorie breakfast product line for the month of June (1) using the traditional product costing system (direct labor cost is the cost Traditional product costing Activity-based costing Quality-control overhead cost to be assigned By what amount does the traditional product costing system undercost or overcost the low-calorie breakfast line? Classity each of the activities as value-added or non-value-added Activites Inspections of material received in-process inspections Click if you would like to Show Work for this question: Open Show Work Question Attempts: Unlimited SAVE FOR LATEA SUBMIT
