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Par Golf Equipment Company produces two types of golf bag: the standard and deluxe models

Economics

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Par Golf Equipment Company produces two types of golf bag: the standard and deluxe models. The total indirect cost to be allocated to the two bags is $35,000. Determine the net revenue that Par Golf can expect from the sale of each bag.
(a) Use direct-labor cost to allocate indirect costs.
(b) Use direct-materials cost to allocate indirect costs.
Data ItemStandardDeluxe
Direct-labor cost$50,000$65,000
Direct-material cost 35,000 47,500
Selling price 60 95
Units produced 1800 1400