Reference no: EM132755306

Clements Company's produces brassfaucets and has the following standard costs perfaucet :

Direct materials $ 25.00

Direct labour 32.00

Variable overhead ( 1.25 direct labour hours at 15 )  18.75

Fixed overhead ( 1.25 direct labour hours at $ 12 )  15.00

Total standard cost perfaucet $ 90.75

overhead rates are based on a denominator activity level of 4,000 direct labour hours During 2021 , Clements Company purchased and sold 3,000 faucets The denominator level of activity represents 50 % of the oretical capacity and 65 % of practical capacity ()

Required :

Problem a) Calculate the total overhead costs at the theoretical, denominator and actual level of activity

Problem b) Clements Company can sell the faucets it producesfor $ 200 per unit calculate the opportunity cost of producing 3,000 faucetsin 2021 compared to the oretical practical and denominator capacity utilization