Question - Cocoa Pet Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled:
Number of Setups for-(Standard)=3 (Deluxe)=7
Number of components for-(Standard)=30 (Deluxe)=50
Number of Direct Labor hours for-(Standard)=650 (Deluxe)=150
Overhead Cost for- (Number of Setups)=$20,000 (Number of Components)=$60,000
Assume a traditional costing system applies the 80,000 of overhead costs based on direct labor hours.
a. What is the total amount of overhead costs assigned to the standard model?
b. What is the total amount of overhead cost assigned to the deluxe model?
Assume an activity based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead.
c. What is the total amount of overhead costs assigned to the standard model?
d. What is the total amount of overhead costs assigned to the Deluxe model?