The Wildcat Company makes diamond rings. It has provided the following information:

Units of Output 2 Units 4 Units

Direct materials $ 18,000 $ 36,000

Workers' wages 6,800 11,560

Variable Overhead (Based on DL Hours) 850 1,445

Supervisors' salaries 32,000 32,000

Equipment depreciation 15,200 15,200

Management is unsure of the learning curve in its operations but it knows that it pays $400 per hour to the specialist employee. Assume all jobs to be equal in size. Also assume that all units are within the relevant range. Keep your answer rounded.

1. How much was the employee paid for making the 8^th unit using incremental unit-time method?

1. $1,960
2. $1,372
3. $1,543.50
4. $2,205