ABC Inc. produces a single product and manufactured 20,000 units and sold 10,000 units last year. ABC had a practical production capacity of 20,000 units per year. The company budgeted the following overhead costs for the year:

Indirect Factory Wages: $140,000

Factory Utilities: $40,000

Factory Depreciation: $10,000

Direct manufacturing costs per unit are $40. The company uses an activity-based costing system which compiles costs into 3 cost pools, machining, milling and assembly. The costs allocated to these activity cost pools break down as follows:

Usage:

Cost: Machining Milling Assembly

Indirect Factory Wages: 50% 30% 20%

Factory Utilities: 40% 40% 20%

Factory Depreciation: 10% 90% 0%

The following cost drivers are used for each of the following activity cost pools:

• Machining: Machine Hours
• Milling: Milling Hours
• Assembly: Direct Labour Hours.

Practical and expected capacity for each of the cost pools are shown below:

• Machining: 45,500 Machine Hours.
• Milling: 61,000 Milling Hours.
• Assembly: 19,000 Direct Labour Hours.

Actual Usage was as follows:

Machining: 20,000 Machine Hours.

Milling: 80,000 Milling Hours.

Assembly: 15,000 Direct Labour Hours.

Each unit requires a budgeted 2 Machine Hours, 1 Milling Hour and 4 Direct Labour Hours.

ABC's policy is to charge $84 per unit.

ABC's budgeted ending finished goods inventory (unadjusted) using activity based costing would be:

a. $530,000

b. $380,000

c. $500,000

d. $150,000