a.(4 points) Meanwhile, the controller of Quality Pretzels, Dave Paxon, had performed an activity-based costing analysis of Quality's overall cost structure. His analysis is captured in the following exhibit:

Activity cost pool Facility level Plant depreciation Productsustaining level Product development Supervisory salaries Batch level Material handling Purchasing Inspection Setup Unit level Electricity Oil and lubrication Equipment maintenance Machinery depreciation Total overhead Annual Budgeted cost $1,050,000 300,000 000,000 300,000 250,000 300,000 400,000 200,000 120,000 100,000 200,000 $5,500,000 Cost driver Product specs Supervisory hours Materialhandling hours # of Purchase orders #1 of inspections # of setups #of machine hours #of machine hours #of machine hours #of machine hours Budgeted levels of cost driver unit for the current year [2014] 15,000 30,000 450,000 450,000 450,000 450,000 Capacity in cost driver units 15,000 100,000 1,000 1,000 1,000 500,000 500,000 500,000 500,000