Answer:
$46,800
Explanation:
Total overhead costs based on traditional systems of both products are: $52,000 +$78,000 = $130,000
Assuming that Perry Corporation applies the activity-based (setups and components) costing system instead of the traditional one, the overhead cost for the standard model can be calculated as following:
+) Overhead cost of each setup (for both products) = $52,000/(12 + 28) = $1,300
+) Overhead cost of each components (for both products)
= 78,000 / (8+12) = $3,900
=> Total overhead costs using activity - based costing system is:
Total overhead costs = 1,300 x Number setups needed for standard model + 3,900 x Number of components needed for standard model
= 1,300 x 12 + 3,900 x 8
= $46,800
