Question
Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled. Number of
Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled.
Number of Number of Number of
Product Setups Components Direct Labor Hours
Standard 22 8 375
Deluxe 28 12 225
Overhead costs $20,000 $40,000
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Assume a traditional single-rate costing system applies the total $60,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model and how would that be journalized? (2 points)
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Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the number of setups amount of overhead costs assigned to the deluxe model? (2 points)
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Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the deluxe model and how would that be journalized? (3 points)
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