Nichols Inc. manufactures remote controls. Currently the company uses a plant-wide rate for allocating manufacturing overhead. The plant manager is considering switching-over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows:

Activities Cost driver Allocation Rate

Material handling Number of parts $7 per part

Assembly Labor hours $20 per hour

Inspection Time at inspection station $10 per minute

The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $600 per labor hour.

What are the indirect manufacturing costs per remote control assuming an activity-based-costing method is used and a batch of 100 remote controls are produced? The batch requires 470 parts, 9 direct manufacturing labor hours, and 18 minutes of inspection time.

Select one:

a. $6.00 per remote control

b. $37.00 per remote control

c. $36.50 per remote control

d. $3650.00 per remote control