Barnes Corporation manufactures two models of office chairs, a standard and a de

Question

Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled.

                                            Number of                 Number of                 Number of

            Product                          Setups              Components           Direct Labor Hours

            Standard                              22                               8                                 375

            Deluxe                                 28                             12                                 225

            Overhead costs             $20,000                       $40,000

Assume a traditional single-rate costing system applies the total $60,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model and how would that be journalized? (2 points)

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 number of setups amount of overhead costs assigned to the deluxe model? (2 points)

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 deluxe model and how would that be journalized? (3 points)

Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled. Assume a traditional single-rate costing system applies the total $60,000 of overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model and how would that be journalized? 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 number of setups amount of overhead costs assigned to the deluxe model? 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 deluxe model and how would that be journalized?

Explanation / Answer

1)

$37,500

2)

[$60,000 / (375 + 225)] x 225 = $22,500

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