Question
Rachel's Pet Supply Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled:
Rachel's Pet Supply Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled:
| Activity | Overhead cost | Cost driver | Standard | Deluxe |
| Setup | $40,000 | # of setup | 3 setups | 7 setups |
| Inspection | $120,000 | # of inspection | 30 inspection | 50 inspection |
| Total manufacturing overhead | $160,000 |
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| Product | Direct Labor Hours |
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| Standard | 650 |
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| Deluxe | 150 |
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Assume an activity-based costing system is used and that the number of setups and the number of inspections are identified as the activity-cost drivers for overhead. What is the total amount of overhead costs assigned to the standard model?
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Accounting Managing Business Information Preliminary Edition Volume I
Authors: Thomas L. Albright , Robert W. Ingram
1st Edition
0324061625, 978-0324061628
