Question 17 GoGo Ltd. manufactures three models of children's swing sets: Standard, Deluxe, and Super. The Standard set is made of steel, the Deluxe set is made of aluminum, and the Super set is made of a titanium-aluminum alloy. Because of the different materials used, production requirements differ significantly across models in terms of machine types and time requirements. However, once the parts are produced, assembly time per set is similar for the three models. For this reason, GoGo has adopted the practice of allocating overhead costs on the basis of machine hours. Last year, the company produced 5,000 Standard sets, 500 Deluxe sets, and 2,000 Super sets. The company had the following revenues and expenses for the year: GOGO LTD. Income Statement Year Ended December 31, 2020 Standard Deluxe Super Total Sales Direct costs: $475,000 $380,000 $560,000 $1,415,000 200,000 54,000 Direct materials 150,000 240,000 24,000 590,000 92,000 Direct labour 14,000 Variable overhead costs Machine set-ups Order processing Warehouse Shipping 24,790 59,800 91,200 32,000 525,210 Contribution margin Fixed overhead costs: Plant administration Other 88,160 182,900 $254,150 Gross profit The chief financial officer of GoGo has hired a consultant to recommend cost allocation bases. The consultant has recommended the following