Question

Eason Company manufactures wheel rims. The controller expects the following ABC allocation rates for 2018:

Activity Allocation Base Predetermined Overhead

Allocation Rate

Materials handling Number of parts $ 4.00 per part

Machine setup Number of setups 400.00 per setup

Insertion of parts Number of parts 26.00 per part

Finishing Number of finishing hours 90.00 per hour

Eason produces two wheel rim models: standard and deluxe. Expected data for 2018 are as follows:

Standard Deluxe

Parts per rim 4.0 7.0

Setups per 500 rims 18.0 18.0

Finishing hours per rim 1.0 5.5

Total direct hours per rim 5.0 6.0

The company expects to produce 500 units of each model during the year.

Requirements

1. Compute the total estimated indirect manufacturing cost for 2018.

Short answer

Total estimated indirect cost: $463,900

Step-by-step solution

Step-by-Step-SolutionStep 1: Computation for the standard model

$\begin{array}{c}\mathbf{Total}\mathbf{}\mathbf{Material}\mathbf{}\mathbf{handling}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocationrate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{perunit}\mathbf{\times }\mathbf{No}\mathbf{.}\mathbf{}\mathbf{of}\mathbf{}\mathbf{expected}\mathbf{}\mathbf{units}\mathbf{}\mathbf{to}\mathbf{}\mathbf{produced}\\ \mathbf{=}\mathbf{\$}\mathbf{4}\mathbf{\times }\mathbf{4}\mathbf{\times }\mathbf{500}\\ \mathbf{=}\mathbf{\$}\mathbf{8}\mathbf{,}\mathbf{000}\end{array}$

role="math" localid="1653231446438" $$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Machine}\mathbf{}\mathbf{setup}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{of}\mathbf{}\mathbf{setups}\mathbf{}\mathbf{per}\mathbf{}\mathbf{500}\mathbf{units} \\ \begin{array}{c}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{400}\mathbf{\times }\mathbf{18}\\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{200}\end{array} \end{gathered}$$

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Insertion}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{per}\mathbf{}\mathbf{unit}\mathbf{\times }\mathbf{No}\mathbf{.}\mathbf{}\mathbf{of}\mathbf{}\mathbf{expected}\mathbf{}\mathbf{units}\mathbf{}\mathbf{to}\mathbf{}\mathbf{produced} \\ \begin{array}{c}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{26}\mathbf{\times }\mathbf{4}\mathbf{\times }\mathbf{500}\\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{52}\mathbf{,}\mathbf{000}\end{array} \end{gathered}$$

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Finishing}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{finishing}\mathbf{}\mathbf{hour}\mathbf{}\mathbf{perunit}\mathbf{\times }\mathbf{No}\mathbf{.}\mathbf{}\mathbf{of}\mathbf{}\mathbf{expected}\mathbf{}\mathbf{units}\mathbf{}\mathbf{to}\mathbf{}\mathbf{produced} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{90}\mathbf{\times }\mathbf{1}\mathbf{\times }\mathbf{500} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{45}\mathbf{,}\mathbf{000} \end{gathered}$$

role="math" localid="1653231799219" $$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{indirect}\mathbf{}\mathbf{cost}\mathbf{}\mathbf{for}\mathbf{}\mathbf{standard}\mathbf{}\mathbf{model}\mathbf{=}\mathbf{Material}\mathbf{}\mathbf{handling}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Machine}\mathbf{}\mathbf{set}\mathbf{}\mathbf{up}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Insertion}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Finishing}\mathbf{}\mathbf{cost} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{8}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{200}\mathbf{+}\mathbf{\$}\mathbf{52}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{45}\mathbf{,}\mathbf{000} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{108}\mathbf{,}\mathbf{200} \end{gathered}$$

Computation for the Deluxe model

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Materialhandling}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{perunit}\mathbf{\times }\mathbf{No}\mathbf{.}\mathbf{of}\mathbf{}\mathbf{expected}\mathbf{}\mathbf{units}\mathbf{}\mathbf{to}\mathbf{}\mathbf{produced} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{4}\mathbf{\times }\mathbf{7}\mathbf{\times }\mathbf{500} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{14}\mathbf{,}\mathbf{000} \end{gathered}$$

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Machine}\mathbf{}\mathbf{setup}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{of}\mathbf{}\mathbf{setups}\mathbf{}\mathbf{per}\mathbf{}\mathbf{500}\mathbf{units} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{400}\mathbf{\times }\mathbf{18} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{200} \end{gathered}$$

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Insertion}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{per}\mathbf{}\mathbf{unit}\mathbf{\times }\mathbf{No}\mathbf{.}\mathbf{}\mathbf{of}\mathbf{}\mathbf{expected}\mathbf{}\mathbf{units}\mathbf{}\mathbf{to}\mathbf{}\mathbf{produced} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{26}\mathbf{\times }\mathbf{7}\mathbf{\times }\mathbf{500} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{91}\mathbf{,}\mathbf{000} \end{gathered}$$

role="math" localid="1653232285079" $$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{Finishing}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}\mathbf{\times }\mathbf{Number}\mathbf{}\mathbf{finishing}\mathbf{}\mathbf{hour}\mathbf{}\mathbf{per}\mathbf{}\mathbf{unit}\mathbf{\times }\mathbf{No}\mathbf{.}\mathbf{of}\mathbf{}\mathbf{expected}\mathbf{}\mathbf{units}\mathbf{}\mathbf{to}\mathbf{}\mathbf{produced} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{90}\mathbf{\times }\mathbf{5}\mathbf{.}\mathbf{5}\mathbf{\times }\mathbf{500} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{247}\mathbf{,}\mathbf{500} \end{gathered}$$

role="math" localid="1653232414480" $$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{indirect}\mathbf{}\mathbf{cost}\mathbf{}\mathbf{for}\mathbf{}\mathbf{standard}\mathbf{}\mathbf{model}\mathbf{=}\mathbf{Material}\mathbf{}\mathbf{handling}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Machine}\mathbf{}\mathbf{steup}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Insertion}\mathbf{}\mathbf{of}\mathbf{}\mathbf{parts}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Finishing}\mathbf{}\mathbf{cost} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{14}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{200}\mathbf{+}\mathbf{\$}\mathbf{91}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{247}\mathbf{,}\mathbf{500} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{355}\mathbf{,}\mathbf{700} \end{gathered}$$

Computation of total indirect cost

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{estimated}\mathbf{}\mathbf{indirect}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Estimated}\mathbf{}\mathbf{indirect}\mathbf{}\mathbf{cost}\mathbf{}\mathbf{for}\mathbf{}\mathbf{standrad}\mathbf{}\mathbf{model}\mathbf{+}\mathbf{Estimated}\mathbf{}\mathbf{indirectcost}\mathbf{}\mathbf{for}\mathbf{}\mathbf{deluxe}\mathbf{}\mathbf{model} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{108}\mathbf{,}\mathbf{200}\mathbf{+}\mathbf{\$}\mathbf{355}\mathbf{,}\mathbf{700} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{463}\mathbf{,}\mathbf{900} \end{gathered}$$