ABC costing, price per unit from Job 103 please help!

ABC costing, price per unit from Job 103 please help!

A company has identified the folloing overhead costs and cost drivers for the coming year:

Overhead Item Cost Driver Budgeted Cost Budgeted Activity
Level

Machine setup Number of setups $20,000 200

Inspection Number of inspections 130,000 6,500

Material handling Number of material moves 80,000 8,000

Engineering Engineering hours 50,000 1,000

Estimated direct labor cost was $100,000 and Estimated direct materials cost was $280,000. The following information was collected on three jobs that were
completed during the year:

Job 101 Job 102 Job 103

Direct materialls $5,000 $12,000 $8,000

Direct labor $2,000 $2,000 $4,000

Units completed 100 50 200

Number of setups 1 2 4

Number of inspections 20 10 30

Number of material moves 30 10 50

Engineering hours 10 50 10

The comapny desires a mark-up of 40%. If the company uses activity based costing (ABC), the price of each unit of JOB
103 would be:

A. $98

B. $100

C. $116-This answer is incorrect

D. $140

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