Trailers R UsCompany, which uses an activitybased costingsystem, produces travel trailers and boat trailers. The company allocates batch setup costs to the two products using the following basicdata:

Travel trailers

Boat trailers

Budgeted units to be produced

2,050

3,200

Budgeted number of setups

320

520

Budgeted number of direct labor hours per unit

40

80

Total budgeted setup costs for the year are$155,400.

If the setup costs are allocated using number ofsetups, how much of the total setup costs would be allocated to boattrailers?

A.

$379,250

B.

$155,400

C.

$96,200

This is the correct answer.

D.

$59,200