QUESTION 8

1. Fey 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 $40,000 $80,000

   Assume a traditional costing system applies the $120,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model?

   		$49,600
   		$70,400
   		$75,000
   		$45,000