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TR MC Gu. 5-122 Pasternik Company produces and sells two...
Pasternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities:
Unita produced
Alpha
250
Batch size (units)
10
Total direct labor hours
6,000
Cost per setup
$7,000
Zeta
210,000
500
2,719,500
7,000
Assume the cost per setup remains at $7,000 but that the batch size for product Alpha is changed from 10 to 25 units per batch. Using activity-based and a volume-based
overhead costing that uses direct labor-hours to assign overhead, the amount of setup cost applied to each unit of product Alpha would be: (Round intermediate
calculations and your final answers to the nearest cent.)
Activity Based
Volume Based
Costing
Costing
A)
$1,400.00
$25.40
B)
$1,700.00
$24.40
C)
$ 280.00
$26.40
D)
$ 0.85
$ 1.70
None of these answer choices is correct..