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Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and

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Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Materials handling Manufacturing supervision Assembly Machine setup Inspection and testing Packaging Allocation Number of parts Hours of machine Number of parts Each setup Logged hours Logged hours Base time Costing Rate $ 3.70 per part $ 14.93 per hour $ 3.95 per part $ 57.15 per setup $ 46.15 per hour $ 20.15 per hour LCI currently sells the B-13 model for $4,700 and the F-32 model for $4,860. Manufacturing costs and activity usage for the two products are as follows: B-13 F - 32 Direct materials Number of parts Machine hours Inspection time Packaging time Setups The product cost for model B-13 is: $ 165.15 $ 76.12 173 8.55 3. ee 1.55 7 133 4.33 2. le 1.15 6

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