Latiker, Inc., manufactures and sells two products: Product Y9 and Product W0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected ProductionDirect Labor-Hours Per UnitTotal Direct Labor-HoursProduct Y91008.0800Product W010010.01,000Total direct labor-hours 1,800The direct labor rate is $15.40 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per UnitProduct Y9$253.00Product W0$278.80The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct Y9Product
W0TotalLabor-relatedDLHs$61,4888001,0001,800Machine setupssetups 50,687400300700Order sizeMHs 155,7545,0005,20010,200 $267,929 The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to:
A. $72.41 per setup
B. $29.95 per setup
C. $26.27 per setup
D. $31.15 per setup
Answer: A
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