PA4-1 (Algo) Assigning Costs Using Traditional System, ABC System (LO 4-1, 4-3, 4-4, 4-6) Hazelnut C

PA4-1 (Algo) Assigning Costs Using Traditional System, ABC System (LO 4-1, 4-3, 4-4, 4-6) Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $155,581 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Cost Activity Cost Pools Cost Driver to Pool Materials handling Number of moves $ 3,311 Quality control Number of inspections $ 28,670 Machine maintenance Number of machine hours $123,600 Quantity/Amount Quantity/Amount Consumed by Consumed by Basic Luxury 12 moves 65 moves 240 inspections 120 inspections 5,900 machine hours 4,400 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. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Basic Model Luxury Model Overhead Assigned Overhead Assigned 2. Calculate the activity rates for each cost pool in Hazelnut's ABC system. (Round your answers to the nearest whole dollar.) Activity Rates Materials Handling Quality Control Machine Maintenance per Move per Inspection per Machine Hour 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Basic Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned $ 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. (Round your intermediate final answers to the nearest whole dollar.) Luxury Model Materials Handling Quality Control Machine maintenance Total Overhead Assigned 0 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? Traditional System ABC System

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