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	$	3.00	per part
Manufacturing supervision	Hours of machine time	$	14.86	per hour
Assembly	Number of parts	$	3.60	per part
Machine setup	Each setup	$	56.80	per setup
Inspection and testing	Logged hours	$	45.80	per hour
Packaging	Logged hours	$	19.80	per hour

LCI currently sells the B-13 model for $3,125 and the F-32 model for $2,900. Manufacturing costs and activity usage for the two products are as follows:

	B-13				F-32
Direct materials	$	164.80			$	75.84
Number of parts		166				126
Machine hours		8.20				4.26
Inspection time		2.30				1.40
Packaging time		1.20				0.80
Setups		4				3

The product cost for model F-32 is:

a. $1,698.01.

b. $1,533.51.

c. $1,399.53.

d. $1,145.50.

e. $1,221.10.