MA$1-$ #$28$

Flashlight, Inc. makes two types of flashlights and is implementing an activity$-$based costing system. Previously, all overhead had been applied on the basis of machine hours. The company produces $11,250$ units of the Deluxe model and $21,142$ units of the Compact model. Additional data is as follows:

$\backslash$table$[[$Cost Pool,$\backslash$table$[[$Cost Driver and Estimated$],[$Level of Activity$]],\backslash$table$[[$Estimated$],[$Overhead Cost$]],\backslash$table$[[$Use of Driver by$],[$Deluxe$]],\backslash$table$[[$Use of Cost Driver$],[$by Compact$]]],[\backslash$table$[[$Equipment$],[$Setup$]],100$ setups,$$20,000,65$ setups,$35$ setups$],[\backslash$table$[[$Materials$],[$Ordering$]],140$ orders,$$21,000,95$ orders,$45$ orders$],[\backslash$table$[[$Quality$],[$Control$]],200$ inspections,$$22,000,150$ inspections,$50$ inspections$],[$Machining$,9,000$ machine hours,$$18,{000}_{?},\backslash$table$[[5,000$ machine$],[$hours$]],4,000$ machine hours$],[,$Total Overhead Cost,$$81,000,,]]$

What is the overhead cost per unit for Deluxe when all overhead is applied based on machine hours?

$$7\mathrm{.}20$

$$18\mathrm{.}00$

$$4\mathrm{.}00$

$$27\mathrm{.}20$