Question 5 of 13

Current Attempt in Progress

>

Health 'B Us, Inc., uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products.

To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Health 'B Us

engages in a high level of quality control. Health 'B Us assigns its quality-control overhead costs to all products at a rate of 17% of

direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $74,000. In response to repeated

requests from its financial vice president, Health 'B Us's management agrees to adopt activity-based costing. Data relating to the low-

calorie breakfast line for the month of June are as follows.

Activity Cost Pools

Inspections of material received

In-process inspections

FDA certification

(a)

Cost Drivers

Number of pounds

Number of servings

Customer orders.

Quality-control overhead cost to be assigned

Overhead

Rate

$

$0.90 per pound

$0.33

per serving

$12.00 per order

Compute the quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June (1)

using the traditional product costing system (direct labor cost is the cost driver), and (2) using activity-based costing.

Traditional product costing

Number of Cost Drivers

Used per Activity

5,500 pounds

10,700 servings

430 orders

$

-/1 E :

Activity-based costing/nQuestion 5 of 13

FDA certification.

(a)

<

Customer orders

Quality-control overhead cost to be assigned.

eTextbook and Media

Save for Later

Using multiple attempts will impact your score.

20% score reduction after attempt 1

$12.00

Compute the quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June (1)

using the traditional product costing system (direct labor cost is the cost driver), and (2) using activity-based costing.

Traditional product costing

$

per order

430 orders

$

MacBook Pro

Activity-based costing

-/1

Attempts: 0 of 2 used

(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Submit Answer