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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 $200,512 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 Complete this question by entering your answers in the tabs below. Luxury Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned Cost Assigned to Pool $ 4,312 $ 34,200 $ 162,000 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? Required 1 Required 2 Required 3 Required 4 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. < Required 3 Required 5 26 moves 200 inspections machine 5,400 hours Required 5 > Quantity or Amount Consumed by Luxury 100 inspections 51 moves 5,400 machine hours

Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $200,512 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 Complete this question by entering your answers in the tabs below. Luxury Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned Cost Assigned to Pool $ 4,312 $ 34,200 $ 162,000 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? Required 1 Required 2 Required 3 Required 4 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. < Required 3 Required 5 26 moves 200 inspections machine 5,400 hours Required 5 > Quantity or Amount Consumed by Luxury 100 inspections 51 moves 5,400 machine hours

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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5 Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $200,512 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 Required 1 Complete this question by entering your answers in the tabs below. Cost Driver Number of moves Number of inspections Number of 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. Required 2 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? Luxury Model Materials Handling Cost Assigned to Pool $ 4,312 $ 34,200 $ 162,000 Quality Control Machine Maintenance Total Overhead Assigned Required 3 Required 4 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. Required 5 < Required 3 26 moves 200 inspections machine 5,400 hours Required 5 > Quantity or Amount Consumed by Luxury 51 moves 100 inspections 5,400 machine hours
Transcribed Image Text:5 Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $200,512 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 Required 1 Complete this question by entering your answers in the tabs below. Cost Driver Number of moves Number of inspections Number of 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. Required 2 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? Luxury Model Materials Handling Cost Assigned to Pool $ 4,312 $ 34,200 $ 162,000 Quality Control Machine Maintenance Total Overhead Assigned Required 3 Required 4 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. Required 5 < Required 3 26 moves 200 inspections machine 5,400 hours Required 5 > Quantity or Amount Consumed by Luxury 51 moves 100 inspections 5,400 machine hours
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