Under a contract with the provincial government, Indigo Ltd. analyzes the chemical and bacterial composition of well water in various municipalities in the interior of British Columbia. The contract price is $26.40 per test performed. The normal volume is 10,000 tests per month. Each test requires two testing kits, which have a standard price of $3.65 each. Direct labour to perform the test is 10 minutes at $22.80 per hour. At normal volume, the overhead costs are as follows:

Variable overhead costs
Indirect labour		$19,000
Utilities		3,000
Labour-related costs		16,000
Laboratory maintenance		9,500		$47,500
Fixed overhead costs
Depreciation		27,900
Supervisor		29,700
Base utilities		8,700
Insurance		1,600		67,900
Total overhead				$115,400

Overhead is allocated based on direct labour hours. During May 2022, 8,460 tests were performed. The records show the following actual costs and production data:

		Activity			Actual Cost
Number of test kits purchased		18,080			$65,088
Number of test kits used		17,200
Direct labour		1,610	hours		37,191
Total overhead costs
Variable					45,010
Fixed					68,380

Test kits are kept in inventory at standard cost. At the end of May, no tests were in process.