Find the amount of setup cost allocated to each unit

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Reference no: EM132536541

A company produces and sells two products X and Y. The following information is available relating to setup costs (a part of factory overhead):

                                             X                      Y

Units produced                      16,000            200

Batch size (units)                     400                10

Number of set ups                   40                   20

Direct Labor hour per unit            5                     5

Total direct labor hours            80,000              1,000

Cost per setup $1,080

Total setup cost $64,800

Question 1: Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for X and Y , respectively is:

        X           Y

a. $21.60   $0.54

b. $54.00   $27.00

c. $60.00   $60.00

d. $108      $2.70

e. $200.00   $16,000

Reference no: EM132536541

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