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	Allocation Base	Costing Rate
Materials handling	Number of parts	$	2.80	per part
Manufacturing supervision	Hours of machine time	$	14.84	per hour
Assembly	Number of parts	$	3.50	per part
Machine setup	Each setup	$	56.70	per setup
Inspection and testing	Logged hours	$	45.70	per hour
Packaging	Logged hours	$	19.70	per hour

LCI currently sells the B-13 model for $2,675 and the F-32 model for $2,340. Manufacturing costs and activity usage for the two products are as follows:

	B-13				F-32
Direct materials	$	164.70			$	75.76
Number of parts		164				124
Machine hours		8.10				4.24
Inspection time		2.10				1.20
Packaging time		1.10				0.70
Setups		5				4

The product cost for model B-13 is:

Multiple Choice

• $1,719.24.

• $1,242.33.

• $1,554.74.

• $1,166.73.

• $1,420.76.