Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $138,525 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Cost Assigned to Pool Quantity or Amount. Consumed by Basic 17 moves Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Required 1 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. Complete this question by entering your answers in the tabs below. Required 2 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? Materials Handling Quality Control $ 3,795 $ 37,730 $ 97,000 Required 3 Required 4 Required 5 Calculate the activity rates for each activity pool in Hazelnut's ABC system. Note: Round your answers to the nearest whole dollar. Activity Rates 220 inspections 5,900 machine hours per Move per Inspection Quantity or Amount Consumed by Luxury 52 moves 110 inspections 3,800 machine hours
Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $138,525 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Cost Assigned to Pool Quantity or Amount. Consumed by Basic 17 moves Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Required 1 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. Complete this question by entering your answers in the tabs below. Required 2 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? Materials Handling Quality Control $ 3,795 $ 37,730 $ 97,000 Required 3 Required 4 Required 5 Calculate the activity rates for each activity pool in Hazelnut's ABC system. Note: Round your answers to the nearest whole dollar. Activity Rates 220 inspections 5,900 machine hours per Move per Inspection Quantity or Amount Consumed by Luxury 52 moves 110 inspections 3,800 machine hours
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of
$138,525 in overhead.
The company has identified the following information about its overhead activity pools and the two product lines:
Cost Assigned
to Pool
Quantity or Amount.
Consumed by Basic
17 moves
Activity Pools
Materials handling
Quality control
Machine maintenance
Cost Driver
Number of moves
Number of inspections
Number of machine hours
Required 1
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.
Complete this question by entering your answers in the tabs below.
Required 2
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?
Materials Handling
Quality Control
Machine Maintenance
$ 3,795
$ 37,730
$ 97,000
Required 3 Required 4 Required 5
Calculate the activity rates for each activity pool in Hazelnut's ABC system.
Note: Round your answers to the nearest whole dollar.
Activity
Rates
220 inspections
5,900 machine hours
per Move
per Inspection
per Machine Hour
Quantity or Amount Consumed by Luxury
52 moves
110 inspections
3,800 machine hours
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education