Martin Company manufactures two models of pens-a standard and a deluxe model. Three activities have been identified as cost drivers and the related overhead costs pooled together to arrive at the following information: $$\begin{array} { l l l l }
\text { Product } & \begin{array} { l }
\text { Number of } \
\text { Setups }
\end{array} & \begin{array} { l }
\text { Number of } \
\text { Components }
\end{array} & \begin{array} { l }
\text { Number of } \
\text { DLH }
\end{array} \
\text { Standard } & 20 & 15 & 375 \
\text { Deluxe } & 30 & 45 & 225 \
\text { Costs per pool } & \$ 25,000 & \$ 36,000 & \$ 9,000
\end{array}$$ If a traditional costing system is used, is the overall overhead rate using direct labor hours.
A) $150
B) $117
C) $60
D) $500

Question

Martin Company manufactures two models of pens-a standard and a deluxe model. Three activities have been identified as cost drivers and the related overhead costs pooled together to arrive at the following information: $$\begin{array} { l l l l } 
\text { Product } & \begin{array} { l } 
\text { Number of } \
\text { Setups }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { Components }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { DLH }
\end{array} \
\text { Standard } & 20 & 15 & 375 \
\text { Deluxe } & 30 & 45 & 225 \
\text { Costs per pool } & \$ 25,000 & \$ 36,000 & \$ 9,000
\end{array}$$ If a traditional costing system is used, is the overall overhead rate using direct labor hours.
A) $150
B) $117
C) $60
D) $500

Quizplus · Accepted Answer

The Answer of Martin Company manufactures two models of pens-a standard and a deluxe model. Three activities have been identified as cost drivers and the related overhead costs pooled together to arrive at the following information: $$\begin{array} { l l l l } 
\text { Product } & \begin{array} { l } 
\text { Number of } \
\text { Setups }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { Components }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { DLH }
\end{array} \
\text { Standard } & 20 & 15 & 375 \
\text { Deluxe } & 30 & 45 & 225 \
\text { Costs per pool } & \$ 25,000 & \$ 36,000 & \$ 9,000
\end{array}$$ If a traditional costing system is used, is the overall overhead rate using direct labor hours.
A) $150
B) $117
C) $60
D) $500

Martin Company Manufactures Two Models of Pens-A Standard and a Deluxe