Question
38. (8 points) Ortego Corp manufactures two models of electronic equipment: Standard and Deluxe. The following activity and cost information has been compiled: Product
38. (8 points) Ortego Corp manufactures two models of electronic equipment: Standard and Deluxe. The following activity and cost information has been compiled: Product Standard Number of Setups 120 Deluxe 280 Overhead costs $52,000 Number of Components 800 1,200 $78,000 Number of DL Hours 255 Total 245 $130,000 a. Assume a traditional costing system is used to apply Overhead Costs based on direct labor hours. What is the amount of Overhead Cost assigned to the Standard model? b. Assume an activity-based costing system is used to apply Overhead Costs using number of setups and number of components as the activity-cost drivers for overhead. What is the total amount of Overhead Cost assigned to the Standard model?
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