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ZZZ Inc, currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company

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ZZZ Inc, currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use production setups (SU) and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. ZZZ Inc. will allocate $200,000 to the SU pool and $600,000 to the PC Pool. Cost Driver Quantity by Product (total); # SU'S #PC's Beta 400 60 Zeta 600 140 What is the pool rate for PRODUCTION SETUPS (SU)? $200 $3,000 None of the answers are correct. $1,000

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