Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $179,100 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Amount Consumed by Basic Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned to Pool $ 3,900 $ 40,000 $ 135,200 15 moves 220 inspections machine 5,600 hours Quantity or Amount Consumed by Luxury 50 moves 110 inspections 4,800 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.

Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $179,100 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Amount Consumed by Basic Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Cost Assigned to Pool $ 3,900 $ 40,000 $ 135,200 15 moves 220 inspections machine 5,600 hours Quantity or Amount Consumed by Luxury 50 moves 110 inspections 4,800 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Required Information [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March. The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $92,000. The Platter Valley factory of Bybee Industries uses a two-variance analysis of the total factory overhead variance. Required: 1. Compute the total flexible-budget variance for overhead and the production…
The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments-Fabrication and Assembly. Data for the products and departments are listed below. Product Rings Dings Number of Units 1,150 1,740 $43.11 $52.42 $58.49 $7.49 Labor Hours Per Unit 4 Machine Hours Per Unit 8 11 All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $86,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $65,500. The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours. What is the overhead cost per unit for Rings?
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel (a1) Your answer is incorrect. Car 40,000 Overhead rate $ 1 Total estimated overhead costs for the two product lines are $846,800. Truck 11,000 Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) 1 per direct labor hour
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Car Truck Estimated wheels produced 36,000 15,000 Direct labor hours per wheel 3 Total estimated overhead costs for the two product lines are $ 858,600. Your answer is incorrect. Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Overhead rate $ 10.60 per direct labor hour eTextbook and Media Solution X Your answer is incorrect. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. Car wheels 36000 Truck wheels 45000 %24
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $536,250 are allocated on the basis of machine hours. The Accounting Department's costs of $151,200 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $240,000 and $440,000, respectively. Maintenance Accounting A B Machine hours 755 95 2,400 350 Number of employees 2 2 8 4 What is the Maintenance Department's cost allocated to Department A using the direct method? Multiple Choice $578,400. O $422,000. $284,000. $468,000.
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $143,484 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Amount Consumed by Basic Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Required 1 Complete this question by entering your answers in the tabs below. Basic Model Luxury Model Required 2 Required 3 Required 4 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…
Solomon Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 78, 300 $ 28,910 $ 15,000 $ 180,000 Cost driver 2,700 labor hours 49 setups Percentage of use 18,000 units Production of 730 sets of cutting shears, one of the company's 20 products, took 180 labor hours and 5 setups and consumed 16 percent of the product - sustaining activities. Required Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 730 units…
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel (al) Your answer is correct. Overhead rate $ eTextbook and Media (a2) Total estimated overhead costs for the two product lines are $752,600. Car Car wheels 41,000 Calculate overhead rate. (Round answer to 2 decimal places, eg 12.25) $ 1 Truck wheels $ Truck 10,000 3 Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. 10.60 per direct labor hour Attempts: 1 of 5 used
Vaughn Company manufactures two products, Mini A and Maxi B. Vaughn's overhead costs consist of setting up machines- $890,000; machining- $2,030,000; and inspecting- $640,000. Information on the two products is: Mini A Мaxi В Direct labour hours 14,000 26,000 Machine setups 700 500 Machine hours 21,000 23,000 Inspections 700 600 Overhead applied to Maxi B using traditional costing and direct labour hours is
Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor HoursPer Unit Machine HoursPer Unit Blinks 1,107 5 8 Dinks 1,916 6 5 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $104,200. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $76,800. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is a.$384.03 b.$63.77 c.$14.45 d.$53.15
s
Gibson Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Unit Level $50,600 Req A and B 2,300 labor hours. Production of 890 sets of cutting shears, one of the company's 20 products, took 210 labor hours and 9 setups and consumed 10 percent of the product-sustaining activities. Complete this question by entering your answers in the tabs below. Req C a. Allocated cost b. Allocated cost Activities Batch Level $ 21,160 46 setups Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using…