Hazelnut Corp. manufactures lawn ornaments. It currently has twoproduct lines, the basic and the luxury. Hazelnut has a total of$169,007 in overhead.

The company has identified the following information about itsoverhead 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		$	4,032		25 moves	47 moves
Quality control	Number of inspections		$	33,375		200 inspections	175 inspections
Machine maintenance	Number of machine hours		$	131,600		5,700 machine hours	3,700 machine hours

Required:
1. Suppose Hazelnut used a traditional costing system withmachine hours as the cost driver. Determine the amount of overheadassigned to each product line. (Do not round intermediatecalculations and round your final answers to the nearest wholedollar amount.)



2. Calculate the activity rates for each cost poolin Hazelnut’s ABC system.



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



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



5. Compare the results for a traditional systemwith that of an ABC system. Which do you think is moreaccurate?

	Traditional System
	ABC System