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Racer X 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 Number of Number of Product Setups Components Direct Labor HoursStandard 15 10 750Deluxe 35 15 500 Overhead costs $15,000 $25,000
Problem 1: Assume a traditional costing system applies the $40,000 of overhead costs based on direct labor hours. What is the total amount of overhead cost assigned to the deluxe model?
A) $16,000 B) $24,000C) $25,000D) $15,000
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