Quasi-Tech Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers as follows: Activity. Engineering $1,000,000 Expected Cost Activity Driver Activity Capacity Setups 900,000 Machining Inspection 2,000,000 800,000 Engineering hours Setups 5,000 hours 200 setups 25,000 machine hours Machine hours Inspection hours 2,500 inspection hours Quasi-Tech produces two models: Model C and Model D. The following table shows how the two products consume activity: Units completed Engineering hours Model C 300,000 Model D 200,000 1,000 4,000 Setups 80 Machine hours Inspection hours 20,000 1,500 120 5,000 1,000 Quasi-Tech assigns the overhead costs to Model D using the two most expensive activities for cost pools. The costs of the two relatively inexpensive activities are allocated to the two most expensive activities in proportion to their costs. What is the error in the overhead cost assigned to Model D using ABC (four-driver model) as the benchmark? a. $240,700 b. $313,330 Oc. $626,650 Od. $180,030