Health R Us, Inc. uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products.To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary and nutritious food, Health "RUSengages in a high level of quality control Health R Us assigns its quality control overhead costs to all products at a rate of 17% ofdirect labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70.000. In response to repeatedrequests from its financial vice president, Health Rus's management agrees to adopt activity-based costing Data relating to the lowcalorie breakfast line for the month of June are as followesActivity Cost PoolsInspections of material receivedin-process inspectionsFDA certificationShow Transcribed TextCost DriversNumber of poundsNumber of servingsCustomer ondersOQuality control overhead cost to be assigned $2OverheadRate$0.90 per pound$0.33 per serving$12.00 per orderNumber of Cost DriversUsed per Activity5.500 pounds9.600 servings470 ordersCompute the quality control overhead cot to be assigned to the low-calorie breakfast product line for the month of June (1)using the traditional product costing system (direct labor cost is the cost driver), and (2) using activity-based costingTraditional product costing$Activity-based costingsu

Name: Health R Us, Inc. uses a traditional product costing system to assign
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Description: Health R Us, Inc. uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products.To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary and nutritious foo

Solution :a. Traditional costing System:Using traditional method, OH allocation will be 17% of DL…

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Health R Us, Inc. uses a traditional product casting system to assign overhead costs uniformly to all its packaged multigrain products To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary and nutritious food, Health R Us engages in a high level of quality control Health R Us assigns its quality control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70.000. In response to repeated requests from its financial vice president, Health R Us's management agrees to adopt activity-based costing Data relating to the low calorie breakfast line for the month of June are as follows. Activity Cost Pools Inspections of material received in-process inspections FDA certification Cost Drivers Number of pounds Number of servings Customer onders Overhead Rate $0.90 per pound $0.33 per serving $12.00 per order Number of Cost Drivers Used per Activity 5.500 pounds 9.600 servings 470 orders

Health R Us, Inc. uses a traditional product casting system to assign overhead costs uniformly to all its packaged multigrain products To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary and nutritious food, Health R Us engages in a high level of quality control Health R Us assigns its quality control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70.000. In response to repeated requests from its financial vice president, Health R Us's management agrees to adopt activity-based costing Data relating to the low calorie breakfast line for the month of June are as follows. Activity Cost Pools Inspections of material received in-process inspections FDA certification Cost Drivers Number of pounds Number of servings Customer onders Overhead Rate $0.90 per pound $0.33 per serving $12.00 per order Number of Cost Drivers Used per Activity 5.500 pounds 9.600 servings 470 orders

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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E4-11 Health 'R Us, Inc., uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products. To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Health 'R Us engages in a high level of quality control. Health 'R Us assigns its quality-control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70,000. In response to repeated requests from its financial vice president, Health 'R Us’s management agrees to adopt activity-based costing. Data relating to the low-calorie breakfast line for the month of June are as follows. Activity Cost Pools Inspections of material received In-process inspections FDA certification Cost Drivers Number of pounds Number of servings Customer orders Overhead Rate $0.90 per pound $0.33 per serving $12.00 per order Number of Cost Drivers Used per…
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