Gradwell, Incorporated, manufactures and sells two products: Product K8 and Product I4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product K8	300	5.0	1,500
Product I4	900	3.0	2,700
Total direct labor-hours			4,200

The direct labor rate is $17.20 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product K8	$ 150.20
Product I4	$ 243.70

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Cost Pools	Activity Measures	Estimated Overhead Cost	Expected Activity
			Product K8	Product I4	Total
Labor-related	DLHs	$ 176,064	1,500	2,700	4,200
Machine setups	setups	71,290	400	600	1,000
Order size	MHs	121,396	4,300	4,600	8,900
		$ 368,750

The unit product cost of Product I4 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $421.06 per unit

• $336.22 per unit

• $558.70 per unit

• $509.17 per unit