Jeff Boone, Precision's controller, believes that there is enough variation in the test procedures and cost structure to establish separate costing rates and billing rates at a 40% markup. He also believes that the inflexible rate structure the company is currently using is inadequate in today's competitive environment. After analyzing the company data, he has divided operating costs into the following three cost pools: Labor and supervision $ 500,000 Setup and facility costs 300,000 Utilities 360,000 Total budgeted costs for the period $1,160,000. Calculate.

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