with explanation/solution

. Believing that its traditional cost system may be providing mislead- ing information, BMW company is considering an activity based cost- ing approach. It now employs a full cost system and has been apply- ing its manufacturing overhead on the basis of machine hours. Scanned with CamScanner Chapter 8 298 Number 17- Continued: The company plans on using 50,000 direct labor hours and 30,000 machine hours in the coming year. The following data show the manu- facturing overhead that is budgeted. Activity Cost Driver Budgeted Activity Budgeted Cost 6,000,000 P720,000 Material Handling No. of parts handled No. of setups 750 315,000 Setup costs 540,000 Machining costs Machine hours 30,000 225,000 Quality control No. of batches 500 Cost, sales, and production data for one of the company's product for the coming year are as follows: Prime Costs: Direct material cost per unit P4.40 Direct labor cost per unit, .05 direct labor hour@P15 per hour 0.75 Sales and production data: Expected sales 20,000 units Batch size 5,000 units Setups per batch Total parts per finished unit parts Machine hours required 80 machine hours per batch If the company employs an activity-based costing system, the cost per unit for the product described for the coming year will be: a. P6.00 b. P6.08 C. P6.21 d. P6.30