Reference no: EM133004761

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 Hours
Standard                15                         10                        750
Deluxe                    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 standard model?

A) $16,000
B) $24,000
C) $25,000
D) $15,000