Compute the amount of overhead allocated to the deluxe doors

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Reference no: EM133336775

Question: Grayson Industries manufactures two types of doors - basic and deluxe. Overhead costs are currently allocated using direct labor costs, but the Controller has recommended an activity-based costing system using the data below.

		Activity Level
Activity	Cost Driver	Cost	Deluxe	Basic	Total
Production setup	Number of setups	400,000	45	25	70
Material handling and requisition	Number of parts	360,000	40	160	200
Quality control	Number of inspections	280,000	42	28	70
Total Overhead Cost		$1,040,000
Direct labor costs			$400,000	$600,000	$1,000,000
Direct labor hours			40,000	50,000	90,000

Compute the amount of overhead allocated to the Deluxe doors under activity-based costing.

Reference no: EM133336775

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