Peter\'s Pet Supply Corporation manufactures two models of grooming stations, a

Question

Peter's Pet Supply Corporation manufactures two models of grooming stations, 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                                           8                                   50                                                 150

Deluxe                                               4                                   30                                                 650

Overhead costs                 $50,000                      $120,000

Assume a traditional costing system applies the $170,000 of overhead costs based on direct labor hours.

What is the total amount of overhead costs assigned to the standard model

Explanation / Answer

($170,000/(150+650)) * 150 = $31,875

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