Chang Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Plain and Fancy, about which it has provided the following data:

	Plain				Fancy
Direct materials per unit	$	24.70			$	59.50
Direct labor per unit	$	5.20			$	26.00
Direct labor-hours per unit		0.20				1.00
Annual production		45,000				25,000

The company's estimated total manufacturing overhead for the year is $1,088,000 and the company's estimated total direct labor-hours for the year is 34,000.

The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:

Activities and Activity Measures	Estimated Overhead Cost
Supporting direct labor (DLHs)		$	544,000
Setting up machines (setups)			240,720
Parts administration (part types)			303,280
Total		$	1,088,000

	Expected Activity
	Plain		Fancy		Total
DLHs	9,000		25,000		34,000
Setups	1,050		838		1,888
Part types	632		260		892

The manufacturing overhead that would be applied to a unit of product Fancy under the activity-based costing system is closest to:

Multiple Choice

• $6.40.

• $32.00.

• $70.21.

• $23.81.