XAE-1 company is reviewing the behavior of its various activities. XAD is considering various costs. The company manufactures two models of computers. The laptop computer (model MX10) is a top of the line, deluxe model. The tower computer (model DX 20) is the regular model.The following activity data is provided:

Activity Usage Measures

Model MX10

Model DX20

Total

Units produced annually

15,000

40,000

55,000

Prime costs

$40,000

$100,000

$140,000

Machine hours

40,000

60,000

100,000

Production runs

14

6

20

Direct labor hours

20,000

30,000

50,000

The company primarily has three major activities as follows in the production process:

Activity

Activity Cost

Setups

$50,000

Inspections

$30,000

Power

$15,000

Calculate the unit cost of model MX 10.

a.

$7.10

b.

Some other cost not listed here

c.

$5.20

d.

$3.53