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 deluxe model?
A)$21,960
B)$17,025
C)$16,840
D)$17,210

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 deluxe model?
A)$21,960 
B)$17,025 
C)$16,840 
D)$17,210

Quizplus · Accepted Answer

Setups: 16,000 ÷ (17 + 33)= $320
Components: $18,050 ÷ (7 + 12)= $950
Total amount of overhead cost = ($320 × 33)+ ($950 × 12)= $21,960

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