Louis Corporation,which Uses an Activity-Based Costing System,produces Travel Trailers and Boat

Multiple Choice

Louis Corporation,which uses an activity-based costing system,produces travel trailers and boat trailers.The company allocates batch setup costs to the two products using the following basic data: $\begin{array}{|l|r|r|}\hline &\text { Travel trailers } & \text { Boat trailers } \\\hline \text { Budgeted units to be produced } & 2,000 & 3,000 \\\hline \text { Budgeted number of setups } & 380 & 420 \\\hline \text { Budgeted number of direct labor hours per unit } & 20 & 10\\\hline\end{array}$ Total budgeted setup costs for the year are $140,000.
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If the setup costs are allocated using number of setups,how much of the total setup costs would be allocated to boat trailers?

A) $ 66,500
B) $ 73,500
C) $ 140,000
D) $ 294,737