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A plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: Machine maintenance $120,000

A plant has two categories of overhead: maintenance and inspection.

Costs expected for these categories for the coming year are as follows:

Machine maintenance $120,000

Inspection $200,000

Total expected overhead: $320,000 (120,000 + 200,000 from above)

Expected activity levels for the coming year are as follows:

80,000 direct labor hours

40,000 machine hours

2,500 inspections

The following data has been assembled for use in developing a bid for a proposed job:

Direct materials $1,500
Direct labor $5,000
Machine hours 400
Number of inspections 6
Direct labor hours 750

What would be the total cost of the potential using the activity-based costing and the appropriate cost drivers?

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