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Forest Services uses activity-based costing to determine the cost of its services. The firm has two activity cost pools: activity #1 (activity rate is $30

Forest Services uses activity-based costing to determine the cost of its services. The firm has two activity cost pools: activity #1 (activity rate is $30 per machine hour) and activity #2 (activity rate is $7 per direct material unit).

Forest Services currently uses, on average, 500 machine hours and 2,000 direct materials units each year. The firm also incurs $1,000 in direct costs each month.

The firm has four opportunities to improve its processes (listed below in the answer choices). None of these process improvements is expected to affect revenue. Assume each improvement costs $0.

Which of the following is the MOST profitable process improvement (read the answer choices carefully)?

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