Telecom uses activity-based costing to allocate all manufacturing conversion costs. Telecom produces cellular telephones; each phone has $20.00 of direct materials, includes 50 parts and requires 3 hours of machine time. Additional information follows: Activity Materials handling Machining Assembling Allocation Base Number of parts Machine hours Number of parts Packaging Number of finished units What is the cost of machining per phone? Cost Allocation Rate $3.50 per part $2.00 per machine hour $4.00 per part $3.00 per finished unit