Summer Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are listed as follows:
 

Maintenance	$255,000
Materials handling	125,000
Setups	30,000
Inspection	105,000

Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labor hours. 100,000 direct labor hours are budgeted for next year.

The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would result in new business in future years. Usually bids are based upon full manufacturing cost plus 10 percent.

Estimates for the proposed job are as follows:
 

Direct materials	$15,000
Direct labor (8,000 hours)	$12,000
Number of material moves	100
Number of inspections	120
Number of setups	24
Number of machine hours	4,000

The plant manager has heard of a new way of applying overhead that uses cost pools and activity drivers. Expected activity for the four activity drivers that would be used are:
 

Machine hours	60,000
Material moves	20,000
Setups	3,000
Quality inspections	12,000

What is the total cost of the proposed job if Summer Manufacturing uses direct labor hours as its only activity driver?

a. $53,200

b. $72,000

c. $56,200

d. $68,200