Nixon 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: $$\begin{array} { l l l l }
\text { Product } & \begin{array} { l }
\text { Number of } \
\text { Setups }
\end{array} & \begin{array} { l }
\text { Number of } \
\text { Components }
\end{array} & \begin{array} { l }
\text { Number of } \
\text { DLH }
\end{array} \
\text { Standard } & 22 & 8 & 375 \
\text { Deluxe } & 28 & 12 & 225 \
\text { Costs per pool } & \$ 15,000 & \$ 36,000 & \$ 9,000
\end{array}$$ is the total amount of overhead costs assigned to the standard model assuming traditional costing and applying overhead costs based on direct labor hours is used.

Question

Nixon 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: $$\begin{array} { l l l l } 
\text { Product } & \begin{array} { l } 
\text { Number of } \
\text { Setups }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { Components }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { DLH }
\end{array} \
\text { Standard } & 22 & 8 & 375 \
\text { Deluxe } & 28 & 12 & 225 \
\text { Costs per pool } & \$ 15,000 & \$ 36,000 & \$ 9,000
\end{array}$$ is the total amount of overhead costs assigned to the standard model assuming traditional costing and applying overhead costs based on direct labor hours is used.

Quizplus · Accepted Answer

The Answer of Nixon 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: $$\begin{array} { l l l l } 
\text { Product } & \begin{array} { l } 
\text { Number of } \
\text { Setups }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { Components }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { DLH }
\end{array} \
\text { Standard } & 22 & 8 & 375 \
\text { Deluxe } & 28 & 12 & 225 \
\text { Costs per pool } & \$ 15,000 & \$ 36,000 & \$ 9,000
\end{array}$$ is the total amount of overhead costs assigned to the standard model assuming traditional costing and applying overhead costs based on direct labor hours is used.

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