Billy Company Manufactures Two Models of Pens-A Standard and a Deluxe

Multiple Choice

Billy Company manufactures two models of pens-a standard and a deluxe model. Three activities have been identified as cost drivers and the related overhead costs ($70,000) pooled together to arrive at the following information: $\begin{array}{llll}& \text { Number of } & \text { Number of } & \text { Number of } \\\text { Product } & \text { Setups } & \text { Components } & \text { DLH }\\\text { Standard } & 20 & 15 & 375 \\\text { Deluxe } & 30 & 45 & 225 \\\text { Costs per pool } & \$ 25,000 & \$ 36,000 & \$ 9,000\end{array}$ If activity- based costing is used, is the overhead rate per setup.

A) $500
B) $117
C) $60
D) $150