Pasternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities:

	Alpha			Zeta
Units produced		250			110,000
Batch size (units)		10			500
Total direct labor hours		4,000			940,500
Cost per setup	$	5,000		$	5,000

Assume the cost per setup remains at $5,000 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: (Round intermediate calculations and your final answers to the nearest cent.)

	Activity Based Costing			Volume Based Costing
A)	$	1,000.00		$	18.52
B)	$	1,220.00		$	17.52
C)	$	200.00		$	19.52
D)	$	0.97		$	1.94
E)	None of these answer choices is correct.

rev: 11_26_2018_QC_CS-149245

Multiple Choice

• Option D

• Option E

• Option B

• Option A

• Option C