asternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities:

\begin{array}{lrr} & \text { Alpha } & \text { Zeta } \\\text { Units produced } & 250 & 20,000 \\\text { Batch size (units) } & 10 & 500 \\\text { Total direct labor hours } & 1,000 & 39,000 \\\text { Cost per setup } & \$ 2,000 & \$ 2,000\end{array}

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): $asternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities: \begin{array}{lrr} & \text { Alpha } & \text { Zeta } \\ \text { Units produced } & 250 & 20,000 \\ \text { Batch size (units) } & 10 & 500 \\ \text { Total direct labor hours } & 1,000 & 39,000 \\ \text { Cost per setup } & \$ 2,000 & \$ 2,000 \end{array} Assume the cost per setup remains at $2,000 but that the batch size for product Alpha is changed from 10 to 25 units per batch.Using activity-based and a volume-based overhead costing that uses direct labor-hours to assign overhead, the amount of setup cost applied to each unit of product Alpha would be (rounded to the nearest cent): A)Option A B)Option B C)Option C D)Option D E)None of the above answers is correct$
A)Option A
B)Option B
C)Option C
D)Option D
E)None of the above answers is correct

Customer Profitability Analysis

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