Newby Company Uses an Activity-Based Costing System $\begin{array}{ll}\text { Fixed costs per month } & \$ 240,000 \\\text { Variable cost per setup } & \$ 5,400\end{array}$

Multiple Choice

Newby Company uses an activity-based costing system. Four activities have been identified. The setup activity uses the number of setups as its cost driver. The following budget information is available for this activity:
The company expects to perform 25 setups in June. $\begin{array}{ll}\text { Fixed costs per month } & \$ 240,000 \\\text { Variable cost per setup } & \$ 5,400\end{array}$
-Refer to the Figure.Suppose the company expects 25 setups in June.What would be the total budgeted costs of the setup activity?

A) $135,000
B) $240,000
C) $375,000
D) $397,500