Cellular South uses activity-based costing to allocate all manufacturing conversion costs. Cellular South produces cellular telephones; each phone has $60.00 of direct materials, includes 40 parts and requires 3 hours of machine time. Additional information follows:

Activity	Allocation Base	Cost Allocation Rate
Materials handling	Number of parts	$2.50 per part
Machining	Machine hours	$3.00 per machine hour
Assembling	Number of parts	$2.00 per part
Packaging	Number of finished units	$7.00 per finished unit