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Exercise 17-11 (Part Level Submission) Health R Us, Incy uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain
Exercise 17-11 (Part Level Submission) Health R Us, Incy 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 a rate of 17% of direct labor costs. Its direct labor cost or the month of June for its lo calorie breakfast line is $70,000 In response to repeated requests from its financial ice 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 Activity Cost Pools Inspections of material received Number of Cost Drivers Used per Activity 5,600 pounds Cost Drivers Number of pounds Number of servings Customer orders $0.90 per pound $0.33 per serving10,100 servings 12.00 per order FDA certification 450 orders (a) Your answer ls cormect Compute the quality control o srhead cost to be assigned t the lo ca one breakfast product line for he month oune 1) uang the raditional 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 1377 Click if you would like to Show Work for this question: Open Show Work HoW ANSWER LTN TO LINKC TO Attempts: 1 of 3 used By what amount does the traditional product costing system undercost or overcost the low-calorle breakfast line
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