[t.bean35]

A Pet Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled:

Product Number of Setups
Number of Components
Number of Direct Labour Hours
Standard 3 30 650
Deluxe 7 50 150
Overhead costs $20,000 $60,000


Required:

Assume a traditional costing system applies the $80,000 of overhead costs based on direct labor hours.

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

b. What is the total amount of overhead costs assigned to the deluxe model?

AND,

Assume an activity-based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead.

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

d. What is the total amount of overhead costs assigned to the deluxe model?

e. Explain the difference between the costs obtained from the traditional costing system and the ABC system. Which system provides a better estimate of costs? Why?

[t.bean35]

That's meant to say:
Product No. of set ups No. of components. No. of labor hours.
Standard 3 30 650
Deluxe 7 50 150

[Curlyben]

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[t.bean35]

Lol alryte alryte.. I've been trying to find a way to proceed with this question, but I can't come up with a start. I know the labor hours are the cost driver for the traditional costing system, I just can't seem to find a way how it all relates or how to get them to connect to then assign the right amount to each model. I can not find a example to go off anywhere