Problem: Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled:
Product # of Setups # of Components # of Direct Labor Hours
Standard 22 8 375
Deluxe 28 12 225
Overhead Costs $20,000 $40,000
Q1. Assuming a traditional costing system applies the $60,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model?
a $24,800
b $35,200
c $37,500
d $22,500
Q2. Assume a traditional costing system applies the $60,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the deluxe model?
a $24,800
b $35,2500
c $37,500
d $22,500
Q3. Number of setups and number of components are identified as activity cost drivers for overhead. Assuming an ABC system is used, what is the total amount of overhead costs assigned to the standard model?
a $24,800
b $35,200
c $37,500
d $22,500
Q4. Number of setups and number of components are indentified as activity cost drivers for overhead. Assuming an ABC system is used, what is the total amount of overhead costs assigned to the deluxe model?
a $24,800
b $35,200
c $37,500
d $22,500