asternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities: $\begin{array}{lrr}
& \text { Alpha } & \text { Zeta } \
\text { Units produced } & 250 & 20,000 \
\text { Batch size (units) } & 10 & 500 \
\text { Total direct labor hours } & 1,000 & 39,000 \
\text { Cost per setup } & \$ 2,000 & \$ 2,000
\end{array}$Assume the cost per setup remains at $2,000 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 (rounded to the nearest cent):
A)Option A
B)Option B
C)Option C
D)Option D
E)None of the above answers is correct

Question

asternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities: $\begin{array}{lrr} 
& \text { Alpha } & \text { Zeta } \
\text { Units produced } & 250 & 20,000 \
\text { Batch size (units) } & 10 & 500 \
\text { Total direct labor hours } & 1,000 & 39,000 \
\text { Cost per setup } & \$ 2,000 & \$ 2,000
\end{array}$Assume the cost per setup remains at $2,000 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 (rounded to the nearest cent): 
A)Option A 
B)Option B 
C)Option C 
D)Option D 
E)None of the above answers is correct

Quizplus · Accepted Answer

The Answer of asternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities: $\begin{array}{lrr} 
& \text { Alpha } & \text { Zeta } \
\text { Units produced } & 250 & 20,000 \
\text { Batch size (units) } & 10 & 500 \
\text { Total direct labor hours } & 1,000 & 39,000 \
\text { Cost per setup } & \$ 2,000 & \$ 2,000
\end{array}$Assume the cost per setup remains at $2,000 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 (rounded to the nearest cent): 
A)Option A 
B)Option B 
C)Option C 
D)Option D 
E)None of the above answers is correct

Asternik Company Produces and Sells Two Products, Alpha and Zeta