Question
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $442,750 Number of setups 550 Ordering costs 342,000 Number of orders 17,100 Machine costs 794,200 Machine hours 41,800 Receiving 411,600 Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $613,000 $764,000 Direct labor 462,000 455,000 Units completed 16,900 8,900 Direct labor hours 6,500 1,500 Number of setups 390 160 Number of orders 5,200 11,900 Machine hours 24,500 17,300 Receiving hours 2,700 7,100 The company's normal activity is 8,000 direct labor hours.
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