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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 $155,730 in overhead. The
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $155,730 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Cost Assigned to Pool Quantity/Amount Quantity/Amount Consumed by Consumed by Basic Luxury Cost Driver Activity Cost Pools Materials handling Quality control Machine maintenance Number of moves $ 2,880 13 moves 47 moves Number of inspections $ 35,250 200 inspections 100 inspections Number of 5,800 machine 4,000 machine machine hours $117,600 hours 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.) Basic Model Overhead Assigned Overhead Assigned Luxury Model 2. Calculate the activity rates for each cost pool in Hazelnut's ABC system. (Round your answers to the nearest whole dollar.) Activity Rates Materials Handling Quality Control Machine Maintenance per Move per Inspection per Machine Hour 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.) Basic Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned $ 0 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.) Luxury Model Materials Handling Quality Control Machine maintenance Total Overhead Assigned $ 0
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