A company has identified the folloing overhead costs and cost drivers for the

A company has identified the folloing overhead costs and cost drivers for the coming year:

Overhead Item Cost Driver Budgeted Cost Budgeted Activity
Level

Machine setup Number of setups $20000 200

Inspection Number of inspections 130000 6500

Material handling Number of material moves 80000 8000

Engineering Engineering hours 50000 1000

Estimated direct labor cost was $100000 and Estimated direct materials cost was $280000. The following information was collected on three jobs that were
completed during the year:

Job 101 Job 102 Job 103

Direct materialls $5000 $12000 $8000

Direct labor $2000 $2000 $4000

Units completed 100 50 200

Number of setups 1 2 4

Number of inspections 20 10 30

Number of material moves 30 10 50

Engineering hours 10 50 10

The comapny desires a mark-up of 40%. If the company uses activity based costing (ABC) the price of each unit of JOB
103 would be:

A. $98

B. $100

C. $116-This answer is incorrect

D. $140