Business, 22.02.2021 18:30 jamarhroul

Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $180,055 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Cost Driver Cost Assigned to Pool Quantity/Amount Consumed by Basic Quantity/Amount Consumed by Luxury
Materials handling Number of moves $3,465 12 moves 51 moves
Quality control Number of inspections $36,190 240 inspections 120 inspections
Machine maintenance Number of machine hours $140,400 5,400 machine hours 5,400 machine hours

Required:
a. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.
b. Calculate the activity rates for each cost pool in Hazelnut's ABC system.
c. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system.
d. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system.

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Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the lu...

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