A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead): Plus Max Units produced 200 16,000 Batch size (units) 10 400 Number of setups 20 40 Direct labor hours per unit 5 5 Total direct labor hours 1,000 80,000 Cost per setup$1,080 Total setup cost$64,800 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. $4.00; $4.00.
B. $160.00; $12,800.00.
C. $3.20; $3.20.
D. $.80; $.80.
E. $200.00; $16,000.00.
Answer: A
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