Waterway Professionals, a management consulting firm, specializes in strategic planning for

financial institutions. Paul Harris and Donald Clark, partners in the firm, are assembling a new

strategic planning model for clients to use. The model is designed to be used on most personal

computers and replaces a rather lengthy manual model currently marketed by the firm. To market

the new model, Paul and Donald will need to provide clients with an estimate of the number of

labour hours and the computer time needed to operate the model. The model is currently being

test$-$marketed at five small financial institutions. These financial institutions are listed below,

along with the number of combined computer$/$labour hours used by each institution to run the

model once:

Financial Institutions

Computer$/$Labour

Hours Required

Canadian National $32\mathrm{.}00$

First Funds $58\mathrm{.}00$

Financial Federal $51\mathrm{.}00$

Pacific Coast $38\mathrm{.}00$

Lakeview Savings $38\mathrm{.}00$

Total $217\mathrm{.}00$

Average $43\mathrm{.}40$

Any company that purchases the new model will need to purchase user manuals to access and

operate the system. Also required are specialized computer forms that are sold only by Waterway

Professionals. User manuals will be sold to clients in cases of $28,$ at a cost of $$413$ per case. One

manual must be used each time the model is run because each manual includes a non$-$reusable

computer password for operating the system. The specialized computer forms are sold in

packages of $320$ at a cost of $$64$ per package. One application of the model requires the use of $60$

forms. This amount includes two forms that are generally wasted in each application due to printer

alignment errors. The overall cost of the strategic planning model to user clients is $$15,400.$ Most

clients will use the model four times each year.

Waterway Professionals must provide its clients with estimates of ongoing costs that are incurred

in operating the new strategic planning model. They would like to provide this information in the

form of standard costs.

$($d$)$ Determine the standard materials cost associated with the user manuals and computer forms for each application of the strategic planning model