Manufacturing Activity 1. Machining costs 2. Testing costs 3. Rework costs 4. Ordering costs 5. Engineering costs 7-23 Target prices, target costs, value engineering, cost incurrence, locked-in costs, activity-based costing. Bell Electronics makes an MP3 player, CE100, which has 80 components. Bell sells 7,000 units each month for $70 each. The costs of manufacturing CE100 are $45 per unit, or $315,000 per month. Monthly manufacturing costs are: Direct material costs Direct manufacturing labor costs Machining costs (fixed) Testing costs Rework costs Ordering costs Engineering costs (fixed) Total manufacturing costs Bell's management identifies the activity cost pools, the cost driver for each activity, and the cost per unit of the cost driver for each overhead cost pool as: Description of Activity Machining components Testing components and final product (each unit of CE100 is tested individually) Correcting and fixing errors and defects Ordering of components Designing and managing of products and processes