Bonita Industries manufactures several products including a basic case for a popular smartphone. The company is considering adopting an activity-based costing approach for setting its budget. The company's production activities, budgeted activity costs, and cost drivers for the coming year are as follows. Cost Driver Activity Activity Overhead $ Cost Driver Quantity Machine setup $ 131,250 # of setups 1,750 Inspection 113,750 # of quality tests 350 Materials receiving 200,000 # of purchase orders 2,500 The budgeted data for smartphone case production are as follows. Direct materials $2.15 per unit Direct labor $0.60 per unit Number of setups 175 Number of quality tests 375 Number of purchase orders 55 Production 278,800 units