After many years of using a traditional costing system Adjusting Back Support Ltd. (ABS) has decided to adopt an activity based costing (ABC) system. ABS produces an adjustable back support system that can be installed into cars. The competitive advantage that ABS has over other companies is its ability to take the existing seats and easily retro-fit them with the support system. Since this was their first attempt at ABC costing they have limited the number of cost pools to see if it is worth continuing to use ABC costing. The following is the costing information it has gathered to allocate their overhead costs. Activity Machining Assembling Packaging Allocation Base Number of machine hours Number of parts Number of seats Activity Cost Allocation Rate $30.00 per Machine Hour $0.50 per part $0.90 per finished seat Fiat Canada has begun a bidding process and asked ABS to bid on an annual shipment of 50,000 back supports for the seats in their new Fiat 500 series cars. There are five other companies submitting bids and being able to win this contract would help further establish ABS in the market. You are in charge of the bidding process and have obtained the following information from the production department. Each back support per seat requires the following: 20 parts Direct materials per seat $11 50,000 seats would require 10,000 direct labour hours at $25/hour 400 machine hours would be required to fabricate the supports. 1) Compute the total cost of producing and packaging the 50,000 back supports. Be sure to include the average cost per support. 2) ABS bids on all their jobs using a 30% mark-up on total cost. What price will ABS submit as their bid to Fiat