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How much setup cost will be allocated to each unit

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Exercise - Relating Cost Pools to Products Using Cost Drivers

Power Electronics manufactures portable power supply units. Power has recently decided to use an activity-based approach to cost its products. Production line setups is a major activity at Power. Next year Power expects to perform 2,000 setups at a total cost of $4,000,000. Power plans to produce 800 units of products EP150, which will require two setups.

Required - How much setup cost will be allocated to each unit of EP150 produced?

Reference no: EM131826971

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