North Street 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 standard model? (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
A) $18,475
B) $11,500
C) $19,750
D) $25,450

Question

North Street 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 standard model? (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
A) $18,475 
B) $11,500 
C) $19,750 
D) $25,450

Quizplus · Accepted Answer

Setups: 17,150 ÷ (20 + 29) = $350
Components: $19,800 ÷ (5 + 17) = $900
Total amount of overhead cost = ($350 × 20) + ($900 × 5) = $11,500

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