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Quasi-Tech Corporation Produces Specially Machined Parts Owens Produces Two Models: Model

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Quasi-Tech Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications) . Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers:  Activity  Expected Cost  Activity Driver  Activity Capacity  Engineering $1,000,000 engineering hours 5,000 hours  Setups $900,000 setups 200 setups  Machining $2,000,000 machine hours 25,000 machine hours  Inspection $800,000 inspection hours 2,500 inspection hours \begin{array} { c c c c } \text { Activity } & \text { Expected Cost } & \text { Activity Driver } & \text { Activity Capacity } \\ \text { Engineering } & \$ 1,000,000 & \text { engineering hours } & 5,000 \text { hours } \\ \text { Setups } & \$ 900,000 & \text { setups } & 200 \text { setups } \\ \text { Machining } & \$ 2,000,000 & \text { machine hours } & 25,000 \text { machine hours } \\ \text { Inspection } & \$ 800,000 & \text { inspection hours } & 2,500 \text { inspection hours } \end{array}
Owens produces two models: Model XX and Model Y. The following table shows how the two products consume activity.
 Model C  Model D  Units completed 300,000200,000 Engineering hours 1,0004,000 Setups 80120 Machine hours 20,0005,000 Inspection hours 1,5001,000\begin{array}{lcc}&\text { Model C } & \text { Model D }\\\text { Units completed } & 300,000 & 200,000 \\\text { Engineering hours } & 1,000 & 4,000 \\\text { Setups } & 80 & 120 \\\text { Machine hours } & 20,000 & 5,000 \\\text { Inspection hours } & 1,500 & 1,000\end{array} First determine the overhead costs assigned to model D using the two most expensive activities for cost pools. The costs of the two relatively inexpensive activities are allocated to the two most expensive activities in proportion to their costs. (Round to two decimal places.) The engineering cost assigned to model D would be


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