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. Atmel Inc. manufactures and sells two products. Data with regard to these products are given below. Product A Product B Units produced and sold

. Atmel Inc. manufactures and sells two products. Data with regard to these products are given below.

Product A Product B

Units produced and sold 30,000 12,000

Machine hours required per unit 2 3

Receiving orders per product line 50 150

Production orders per product line 12 18

Production runs 8 12

Inspections 20 30

Total budgeted machine hours are 100,000. The budgeted overhead costs are shown below.

Receiving costs $450,000

Engineering costs 300,000

Machine setup costs 25,000

Inspection costs 200,000

Total budgeted overhead $975,000

The cost driver for engineering costs is the number of production orders per product line. Using activity-based costing, the engineering cost per unit for Product B would be

a. $4.00.

b. $10.00.

c. $15.00.

d. $29.25.

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