A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead): $\begin{array}{llcc}
\text { Cost per setup } &\$1,080 \
\text {Total setup cost } &\$64,800
\end{array}$
With traditional allocation of overhead costs, using direct labor hours as the allocation base, the setup cost portion of overhead that is allocated to each unit of product for Plus and Max, respectively is:
A) $.80; $.80.
B) $3.20; $3.20.
C) $4.00; $4.00.
D) $160.00; $12,800.00.
E) $200.00; $16,000.00.

Question

A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead):  $\begin{array}{llcc}
  \text { Cost per setup } &\$1,080 \
 \text {Total setup cost  } &\$64,800
\end{array}$
 With traditional allocation of overhead costs, using direct labor hours as the allocation base, the setup cost portion of overhead that is allocated to each unit of product for Plus and Max, respectively is:
A) $.80; $.80. 
B) $3.20; $3.20. 
C) $4.00; $4.00. 
D) $160.00; $12,800.00. 
E) $200.00; $16,000.00.

Quizplus · Accepted Answer

The Answer of A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead):  $\begin{array}{llcc}
  \text { Cost per setup } &\$1,080 \
 \text {Total setup cost  } &\$64,800
\end{array}$
 With traditional allocation of overhead costs, using direct labor hours as the allocation base, the setup cost portion of overhead that is allocated to each unit of product for Plus and Max, respectively is:
A) $.80; $.80. 
B) $3.20; $3.20. 
C) $4.00; $4.00. 
D) $160.00; $12,800.00. 
E) $200.00; $16,000.00.

A Firm Produces and Sells Two Products, Plus and Max Cost per setup $1,080Total setup cost $64,800\begin{array}{llcc} \text { Cost per setup } &\$1,080 \\ \text {Total setup cost } &\$64,800\end{array} Cost per setup Total setup cost ​$1,080$64,800​

A Firm Produces and Sells Two Products, Plus and Max $\begin{array}{llcc} \text { Cost per setup } &\$1,080 \\ \text {Total setup cost } &\$64,800\end{array}$