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			20,000
Batch size (units)		10			500
Total direct labor hours		1,000			39,000
Cost per setup	$	2,000		$	2,000

Assume the cost per setup remains at $2,000 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: (Rounded to the nearest cent.)

	Activity Based Costing			Volume Based Costing
A)	$	400.00		$	9.00
B)	$	500.00		$	8.00
C)	$	80.00		$	10.00
D)	$	2.25		$	4.50
E)	None of these answer choices is correct.

Multiple Choice

• Option B

• Option D

• Option C

• Option A

• Option E