Answer the following questions using the information below:
Racer X Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled:

-Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead cost assigned to the deluxe model?
A)$25,500
B)$25,000
C)$24,000
D)$12,500

Question

Answer the following questions using the information below:
Racer X Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled:
  
-Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead cost assigned to the deluxe model?
A)$25,500 
B)$25,000 
C)$24,000 
D)$12,500

Quizplus · Accepted Answer

The total overhead cost assigned to the deluxe model is calculated based on the activity-cost drivers. The correct choice is $25,500, which is determined by applying the activity-based costing method to allocate overhead costs based on the number of setups and components specific to the deluxe model.

Answer the Following Questions Using the Information Below