Reference no: EM133004766

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: Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead cost assigned to the deluxe model?

A) $25,500
B) $25,000
C) $24,000
D) $12,500