The Pinewood Furniture Company Pty Ltd plans to manufacture two lines of chairs in the coming year - lounge and patio. The company is considering introducing an activity-based costing system. Given below are each activity, its cost and its related activity driver.

Activity	Cost	Activity Driver
Material Setups	300,000	Number of setups
Material handling	250,000	Number of parts
Cutting	700,000	Number of parts
Assembly	600,000	Direct labour hours
Finishing	450,000	Number of units

The level of activity for the year is:

	Lounge	Patio
Units to be produced	10,000	5,000
Number of Setups	60	60
Number of parts per unit	10	5
Direct Labour Hours per unit	5	2

Under an activity-based costing system, what is the total cost allocated to lounge chairs for the year?

Select one:

a. $1,710,000

b. $ 590,000

c. $1,410,000

d. $ 890,000

e. $1,150,000