Teldar Manufacturing Company is a diversified manufacturer that manufactures three products (M5, Z4, and I8) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: 1 Activity Activity Cost Pool 2 Production $237,552.00 3 Setup 93,660.00 4 Material handling 10,500.00 5 Inspection 53,185.00 6 Product engineering 156,755.00 7 Total $551,652.00 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Material handling Number of parts Inspection Number of inspection hours Product engineering Number of engineering hours The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Number of Number of Number of Number of Hours Setups Parts Inspection Hours Engineering Hours Units M5 1,000 62 82 458 133 1,137 Z4 733 121 147 270 187 1,057 I8 388 237 271 239 215 474 Total 2,121 420 500 967 535 2,668 Each product requires 0.88 machine hour per unit.