View Policies Show Attempt History Current Attempt in Progress Vaughn Industries manufactures several products including a basic case for a popular smartphone. The company is considering adopting an activity-based costing approach for setting its budget. The company's production activities, budgeted activity costs, and cost drivers for the coming year are as follows. Cost Driver Activity Activity Overhead $ Cost Driver Quantity Machine setup $239,200 # of setups 2,600 Inspection 213,200 # of quality tests 520 Materials receiving 407,400 # of purchase orders 4,200 The budgeted data for smartphone case production are as follows. Direct materials $3.05 per unit Direct labor $0.43 per unit Number of setups 260 Number of quality tests 460 Number of purchase orders 50 Production 434,740 units