Metal Works Corporation has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs $($the cost driver for each overhead cost pool is also shown$)$:

Activity Total Cost Cost Driver

Maintenance $$20,000$ Machine hours

Materials receiving $48,000$ Shipments received

Machine setups $8,000$ # of setups

Inspection $19,200$ # of inspections

The expected activity for the year for various cost drivers is:

Cost Drivers Expected Activity

Direct Labor Hours $32,000$

Machine$-$hours $10,000$

Shipments Received $4,000$

Setups $80$

Quality inspections $6,400$

The company is considering accepting a significant production contract. Estimates for the contract are as follows:

Contract Estimate

Direct materials $$96,000$

Direct labor $(640$ hours$)$ $$128,000$

Number of material shipments received $200$

Number of inspections $320$

Number of setups $8$

Number of machine$-$hours $1,200$

How much overhead should be allocated to the contract based on Activity$-$Based Costing?

NOTE: Round all per$-$unit costs to nearest cent.

Select one:

a$.$ $$1,904$

b$.$ $$6,560$

c$.$ None of the amounts listed.

d$.$ $$3,840$

e$.$ $$4,240$