Dartmouth Corporation manufactures two models of office chairs,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 costs assigned to the standard model?
A)$81,200
B)$81,900
C)$61,200
D)$101,200

Question

Dartmouth Corporation manufactures two models of office chairs,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 costs assigned to the standard model?
A)$81,200 
B)$81,900 
C)$61,200 
D)$101,200

Quizplus · Accepted Answer

Setups: $75,000 ÷ (18 + 32)= $1,500
Components: $87,400 ÷ (9 + 14)= $3,800
Total amount of overhead costs = ($1,500 × 18)+ ($3,800 × 9)= $61,200

Dartmouth Corporation Manufactures Two Models of Office Chairs,a Standard and a Deluxe