Pasternik Company Produces and Sells Two Products,Alpha and Zeta

Multiple Choice

Pasternik Company produces and sells two products,Alpha and Zeta.The following information is available relating to its setup activities:
Use of activity-based costing would allocate the following amounts of setup cost to each unit (rounded to the nearest cent) :

A) A
B) B
C) C
D) D
General Calculations:
# of Alpha batches = 250/10 = 25
# of Zeta batches = 20,000/500 = 40
Total batches = 65 = 40 + 25
Alpha:
Total Set-up Cost = 25 x $2,000 = $50,000
$50,000/250 units = $200 per unit
Zeta:
Total Set-up Cost = 40 x $2,000 = $80,000
$80,000/20,000 = $4 per unit