As you learned in the previous chapters, Current Desigss has two main product lines$-$composite kayales, which are handmade and very tabor $-$nitenstive, and rotomotded kayabs, which require less labor but emptoy more expentive equipment. Current Desigrs' controller, Diane Burwell, is now evaluating several different methods of assigning overhead to these products it is important to ensure that costs are appropriately assigned to the company's products. At the same time, the sntem that is used must not be so complex that its costs are greater than its benefits.

Diane has declded to use the following activities and costs to evaluate the methods of assigning overhead.

$\backslash$table$[[$Activities$,$Cost$],[$Deslgning new models,$$112,000],[$Cresting and tertiot protetypes,$136,000],[$Creating molds for kinaks,$168\mathrm{.}000],[$Operating oven for the rotomolded kayaks,$37\mathrm{.}000],[$Operating the vacuum line for the componite kayas,$26\mathrm{.}000],[$Supervisint produstion ewploytes,$184000],[$Curing time the time that is needed for the chemical processes to finish before the next step in the production process mary of these conts we related to the space required in the building$),192000],[$Total$,5855000]]$

As Diane ocamines the data, she decibes that the cost of opersting the oven for the rotomolded kayaks and the cost of operating the vacuam line for the compovite karaks can be directly asisped to each of theit product lines and do not need to be asigned with the other costs.

For purpoues of this analyik assume thac Current Desfon ines $$248,000$ in direct labor conts to produce $1\mathrm{.}000$ componite knyak and $$280,000$ in direct isbor costs to produce A$\mathrm{.}000$ rotorpolded kayphs each yeat.

$($a$)$

One method of asyifing overhead would assigh the common costs to each product line by using an awignment basls such as the number of employes working on each type of karak or the arnount of factory space used for the production of each type of kayak: Olane knows that about sos of the zes of the plat nnd sons of the employees work on the composite kayals, and the remaining space and other cmplortes wort on the fotbrnolded kraks UWing this information and remembering that the costs of operating plocen,es $12525)$