Red Corporation manufactures a variety of products. In the past, Red has been using a traditional costing system in which the predetermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this system was distorting costs and selling prices, Red has decided to switch to an activity-based costing system for manufacturing overhead costs using three activity cost pools. Selling prices are still to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows:

Activity Cost Pool	Activity Measure	Estimated Activity	Estimated Overhead Cost
Machine Setups.................	Number of setups	400	$150,000
Quality Control....................	Number of inspections	1,500	$180,000
Other Overhead..................	Machine hours	30,000	$480,000

Information (on a per unit basis) related to Model #36 are as follows:

	Model #36
Direct material cost................................	$540
Direct labor cost......................................	$600
Number of setups...................................	3
Number of inspections..........................	3
Number of machine hours...................	8

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