Question
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $184,537 in overhead. The
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $184,537 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Cost Driver Cost Assigned to Pool Quantity or Amount Consumed by Basic Quantity or Amount Consumed by Luxury Materials handling Number of moves $ 2,992 18 moves 50 moves Quality control Number of inspections $ 35,945 220 inspections 110 inspections Machine maintenance Number of machine hours $ 145,600 5,600 machine hours 4,800 machine hours Required: Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Calculate the activity rates for each activity pool in Hazelnuts ABC system. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate?
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $184,537 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: 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. 2. Calculate the activity rates for each activity pool in Hazelnut's ABC system. 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? 5. Compare the results for a traditional system with that of an ABC system. Which do you think is Complete this question by entering your answers in the tabs below. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determin assigned to each product line. Note: Do not round intermediate calculations and round your final answers to the nearest whole doll Complete this question by entering your answers in the tabs below. Calculate the activity rates for each activity pool in Hazelnut's ABC system. Note: Round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. Note: Round your intermediate and final answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Compare the results for a traditional system with that of an ABC system. Which do you think is moStep by Step Solution
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