Question
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $141,413 in overhead. The
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $141,413 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 | $ 3,933 | 21 | moves | 48 | moves |
Quality control | Number of inspections | $ 28,480 | 220 | inspections | 110 | inspections |
Machine maintenance | Number of machine hours | $ 109,000 | 5,100 | machine hours | 5,800 | machine hours |
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Calculate the activity rates for each activity pool in Hazelnuts ABC system.
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Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system.
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Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system.
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