Vintage Fun reproduces

oldfashioned

style roller skates and skateboards. The annual production and sales of roller skates is

900

units, while

1,790

skateboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Roller skates require

2.5

direct labor hours per unit, while skateboards require

2.25

direct labor hours per unit. The total estimated overhead for the period is

$113,800.

The company is looking at the possibility of changing to an

activitybased

costing system for its products. If the company used an

activitybased

costing system, it would have the following three activity cost pools:

		Expected activity
Activity cost pool	Estimated overhead cost	Roller skates	Skateboards	Total
Setup costs	$6,250	395	310	705
Engineering costs	$16,400	490	650	1,140
Maintenance costs	$91,150	2,275	2,238	4,513

The cost pool activity rate for Engineering Costs would be closest to (Round all answers to two decimal places.)

A.

$20.20

per engineering hour.

B.

$14.39

per engineering hour.

C.

$8.87

per engineering hour.

D.

$7.33

per engineering hour.