Performance Bicycle Company makes steel and titanium handlebars for bicycles. It requires approximately one hour of labor to make one handlebar of either type. During the most recent accounting period, Barr Company made 7,000 steel bars and 3,000 titanium bars. Setup costs amounted to $84,000. One batch of each type of bar was run each month. If a single companywide overhead rate based on direct labor hours is used to allocate overhead costs to the two products, the amount of setup cost assigned to the steel bars will be:
A. $49,000.
B. $8,400.
C. $84,000.
D. $58,800.
Answer: D
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