Trintal Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled:
$\begin{array}{lrrr}
&\text { Number of }&\text { Number of }&\text { Number of } \
\text { Product }&\text { Setups }&\text { Components }&\text { Direct Labor Hours }\
\text { Standard } & 15 & 10 & 750 \
\text { Del uxe } & 35 & 15 & 500 \
\text { Overhead costs } & \$ 16,500 & \$ 23,500
\end{array}$
-Assume a traditional costing system applies the $40,000 of overhead costs based on direct labor hours.What is the total amount of overhead cost assigned to the deluxe model?
A) $16,000
B) $24,000
C) $25,000
D) $15,000

Question

Trintal Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled:
 $\begin{array}{lrrr}
&\text { Number of }&\text { Number of }&\text { Number of } \
\text { Product }&\text { Setups }&\text { Components }&\text { Direct Labor Hours }\
\text { Standard } & 15 & 10 & 750 \
\text { Del uxe } & 35 & 15 & 500 \
\text { Overhead costs } & \$ 16,500 & \$ 23,500 
\end{array}$
-Assume a traditional costing system applies the $40,000 of overhead costs based on direct labor hours.What is the total amount of overhead cost assigned to the deluxe model?
A) $16,000
B) $24,000
C) $25,000
D) $15,000

Quizplus · Accepted Answer

The total overhead is $40,000, and the total direct labor hours are 1,250 (750 for standard and 500 for deluxe). The overhead rate per direct labor hour is $40,000 / 1,250 = $32. The deluxe model has 500 direct labor hours, so the overhead assigned is 500 * $32 = $16,000.

Trintal Corporation Manufactures Two Models of Motorized Go-Carts, a Standard