Dartmouth Corporation manufactures two models of office chairs, a standard and a deluxe model, Number of setups and number of components are identified as activity-cost drivers for overhead. The standard model requires 19 setups and 9 components. The standard model's overhead costs are $50,000. The deluxe model requires 31 setups and 18 components. The deluxe model's overhead costs are $102,600. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model?

Dartmouth Corporation manufactures two models of office chairs, a standard and a deluxe model, Number of setups and number of components are identified as activity-cost drivers for overhead. The standard model requires 19 setups and 9 components. The standard model's overhead costs are $50,000. The deluxe model requires 31 setups and 18 components. The deluxe model's overhead costs are $102,600. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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XYZ Co.currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Product Pool No.1 (Driver: DLH) Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) Fi Zeta 1,200 55 2,250 Beta 2,800 45 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Beta by using activity-based costing procedures would be: O a. $444,000. O b. $472,00. Oc. $328,000. O d. None of the given answers. O e. $356,000. NEXT PAGE OUS PAGE