Lang Boards manufactures two models ofsurfboards, Basic andCompetition, in a facility in Southern California. Infabrication, machine setup costs are driven by the number ofsetups, machine maintenance and utility costs increase with the number of machinehours, and indirect labor costs increase with direct labor hours. Facility rent and machine depreciation arefixed, and are the basis of manufacturing capacity. Fixed costs are allocated equally to each unitproduced, regardless of model.Currently, Lang uses 60% of its manufacturing capacity. The cost of unused capacity is not assigned toproducts, but is expensed as a separate line item. For 2020, Lang has budgeted thefollowing:

Lang Boards Budgeted Costs for the Year Ended December 31, 2020 Direct materialsBasic boards Direct materialsCompetition boards Direct manufacturing laborBasic boards Direct manufacturing laborCompetition boards Machine setup costs Machine maintenance and utility costs Indirect labor costs Facility rent Machine depreciation 336,000 629,000 214,200 499,800 165,000 420,000 142,800 390,000 130,000 Other information: Competition Units produced 7,400 Machine hours 57,000 Number of setups 'i ,200 Direct labor-hours 29,400