What is the overhead allocation rate for the setup of production lines? 

 

Group of answer choices

$26,000 divided by 1,250 runs = $20.80 per run

 

$61,000 divided by 1,250 setup hours = $48.80 per hour.

 

$18,000 divided by 7,500 hours = $2.40 per setup hour.

 

$35,000 divided by 1,250 setup hours = $28 per setup hour.

 

$26,000 divided by 1,250 setup hours = $20.80 per setup hour.

(All financial data in 000's) Sales Materials Direct Labor Variable Overhead Expenses ($26,000 in total) Fixed Overhead Expenses ($35,000 in total) Selling and Admin Expenses (all fixed) Units to be Produced (000's) Units to be Sold (000's) iSports Watch iWatch-Standard $44,000 $75,600 $12,000 $25,000 $6,000 $10,000 ? ? ? ? $1,000 $500 250 300 200 280 Some additional data related to overheads are presented below: Activity Costs $(000's) Setup Production Line 18,000 Repair Machines 8,000 Batch Assembly of Components 35,000 Units of the Cost Driver Base Available Cost Drivers Total iSports Watch iWatch-Standard Number of Production Runs 1,250 900 350 Number of Setup Hours 7,500 5,000 2,500 Number of Machine Hours 36,000 24,000 12,000