Determine the amount of overhead hazelnut will assign to

Reference no: EM13577861

Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $144,020 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		$	3,315	22 moves	43 moves
Quality control	Number of inspections		$	30,705	180 inspections	165 inspections
Machine maintenance	Number of machine hours		$	110,000	4,600 machine hours	5,400 machine hours


Basic Model		Overhead Assigned
Luxury Model		Overhead Assigned

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. (Do not round your intermediate calculations.)

Calculate the activity rates for each cost pool in Hazelnut's ABC system.

	Activity Rates
Materials Handling		Per Move
Quality Control		Per Inspection
Maintenance		Per Machine Hour

3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system.

Basic Model
Materials Handling
Quality Control
Maintenance
Total Overhead Assigned

4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system.

Luxury Model
Materials Handling
Quality Control
Maintenance
Total Overhead Assigned

Reference no: EM13577861

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