Tom Nook uses a factory to make island materials. The factory has 7,400 square feet of space and Tom rents the factory for $3,550 a month. Tom Nook has decided to switch to an activity-based costing system, and uses the following cost pools: Setups, Machining, Fine Tuning, and Quality Control. 3,000 square feet of the factory are used for machining, while 1,750 square feet (each) are used for Setups and Quality Control. Fine Tunring uses 900 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Setups cost pool?

Multiple Choice

• $840

• $450

• $1,750

• $3,500