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Miramar Industries manufactures two products, A and B. The manufacturing operating involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:
Each product's total activity in each of the three areas are as follows:
What is the activity rate for Production Setup?
a. $2,500 per setup b. $833 per setup c. $625 per setup d. $400 per setup
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