Pauls Corporation manufactures and sells unique and innovative products. Thus, they follow a product-differentiation strategy with regard to pricing. Because of the unique features of their products, they have a significant amount of pricing flexibility.

They've been usingnormal costingbased a unit-level driver, direct labor cost. Budgeted direct labor cost for the year was $100,000, while budgeted direct materials were $400,000.

They conducted an activity study recently which they heard could help them better understand their costs. The following budgeted activities were identified along with their budgeted amounts and activity levels:

Budgeted Budgeted Activity Overhead Item Cost Driver Machine setup Number of setups Cost $ 20,000 Level 200 Inspection Number of inspections 130,000 6,500 Material handling Engineering Number of material moves Engineering hours 80,000 8,000 50,000 1,000 Total $ 280,000 Direct materials $ Information for three completed jobs are as follows: Job 103 Job 102 5,000 $12,000 $ 8,000 Job 101 Direct labor $ 2,000 $ 2,000 $ 4,000 Units completed 100 50 200 Number of setups 1 2 4 Number of inspections 20 10 30 Number of material moves 30 10 50 Engineering hours 10 50 10