Chrome Fle Edit View History Bookmarks People Window Help C O ezto.mheducation.c
ID: 2430976 • Letter: C
Question
Chrome Fle Edit View History Bookmarks People Window Help C O ezto.mheducation.com/m.tp Acos Bookmarks 064 points Hazelnut Corp manulactures lawn omaments IR ourrently has two product lines, the basic and the luxury Hazelhut has a total of $187,685 in overhead The company has identified the following information about its overhead activity oost pools and the two product lines Cost Driver Materiais handing Quaity control 20iecions s 30 450 100 inspections Number of 153,000 5,800 machine hours 4,600 macine hours Required 1. Suppose Hazelnut used a traditional costing systom with machine hours as the cost driver Determine the amount of overhead assigned to each product line. (D intermediate caliculations and round your final answers to the nearest whole dollar amount Lumury Mode Overhead Assigned 2Calculate the activity rates for each cost pool in Hazeinut's ABC system per MoveExplanation / Answer
Answer for question no 1: Given total overheads = $187685 Total machine hours consumed by basic and luxury lines =5600+4600 =10200 hours. Therefore, machine overhead per machine hour = $187685/10200 =$18.40 Overhead assigned to basic line = $18.40*5600 machine hours =$103040 Overhead assigned to luxury line =$18.40*4600=$84640. Answer for question no.2: Activity cost pool Cost assigned to pool(A) Quantytiy/amount consumed by basic Quantytiy/amount consumed by luxury Total(B) Activity rates (A/B) Materials handling $4,235 13 64 77 $55 Quality control $30,450 250 100 350 $87 Machine maintenance $1,53,000 5600 4600 10200 $15 Answer for question no.3: Amount of overhead assigned to basic line using ABC system is as follows: Activity cost pool Cost assigned to pool(A) Quantytiy/amount consumed by basic (B) Quantytiy/amount consumed by luxury (C ) Total(D) Activity rates E=(A/D) Overhead assigned to Basic line F=B*E Materials handling $4,235 13 64 77 $55 $715 Quality control $30,450 250 100 350 $87 $21,750 Machine maintenance $1,53,000 5600 4600 10200 $15 $84,000 Total $1,87,685 $1,06,465 Total overhead assigned to Basic line =$106465. Answer for question no.4: Activity cost pool Cost assigned to pool(A) Quantytiy/amount consumed by basic (B) Quantytiy/amount consumed by luxury (C ) Total(D) Activity rates E=(A/D) Overhead assigned to luxury line F=C*E Materials handling $4,235 13 64 77 $55 $3,520 Quality control $30,450 250 100 350 $87 $8,700 Machine maintenance $1,53,000 5600 4600 10200 $15 $69,000 Total $1,87,685 $81,220 Total overhead assigned to luxury line =$81220.