Question -
Pretty Dog Corporation manufactures two models of grooming stations, a standard and a deluxe model. Assume a traditional costing system applies the overhead costs based on direct labor hours. the following activity and cost information has been compiled:
A) What is the total amount of overhead costs assigned to the standard model?
B) What is the total amount of overhead costs assigned to the deluxe model?
Assume an activity based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead.
C) What is the total amount of overhead costs assigned to the standard model?
D) What is the total amount of overhead costs assigned to the Deluxe model?
| Product |
Number of Setups |
Number Of Components |
Direct Labor Hours |
| Standard |
5 |
40 |
750 |
| Deluxe |
20 |
60 |
250 |
| Overhead costs |
$60,000 |
$80,000 |