Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury....
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Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $165,210 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Machine maintenance Coat Driver Cost Assigned to Pool Number of moves Number of inspections Number of machine hours $ 4,345 $29,565 $ 131,300 Quantity or Amount Consumed by Basic, 23 moves 220 inspections 5,800 machine hours Quantity or Amount Consumed by Luxury 56 noves 110 inspections 4,300 machine 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. 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? Complete this question by entering your answers in the tabs below. Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $165,210 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Activity Pools Materials handling Quality control Machine maintenance Coat Driver Cost Assigned to Pool Number of moves Number of inspections Number of machine hours $ 4,345 $29,565 $ 131,300 Quantity or Amount Consumed by Basic, 23 moves 220 inspections 5,800 machine hours Quantity or Amount Consumed by Luxury 56 noves 110 inspections 4,300 machine 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. 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? Complete this question by entering your answers in the tabs below.
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