This question is based on the following information. Believing that its traditional cost system may be providing misleading information, an organization is considering an activity-based costing (ABC) approach. It now employs a full- cost system and has been applying its manufacturing overhead on the basis of machine hours. The organization plans on using 50,000 direct labor hours and 30,000 machine hours in the coming year. The following data show the manufacturing overhead that is budgeted. Activity Cost-Driver Budgeted Budgeted Activity Cost Materials handling No. of parts handled 6,000,000 $720,000 Setup Costs No. of setups 750 $315,000 Machining Costs Machine hours 30,000 $540,000 Quality Control No. of batches 500 $225,000 Total Manufacturing Overhead Costs $1,800,000 Cost, sales, and production data for one of the organization's products for the coming year are as follows: Prime Costs Direct material cost per unit $4.40 Direct labor cost per unit .05 DLH @ $15.00/DLH .75 Total prime costs $5.15 Sales and production data: Expected sales 20,000 units Batch Size 5,000 units Setups 2 per batch Total Parts per finished unit 5 parts Machine hours required 80 MH per batch If the organization employs an activity-based costing system, the cost per unit for the product described for the coming year will be Answer Selected VA. Answer: $6.30 Correct A. Answer: $6.30