The Automachine Corporation produces three high-quality components and last year allocated all costs except material on the basis of direct labour hours/unit. However, due to the introduction of CAD/CAM and a complete review of the cost allocation system, Automachine Corporation is considering changing its basis of machined component costs. For the following year the budget and production data have been extracted by the machine manufacturing department: Activity 1 – Automated machinery total cost $1,800,000 Activity 2 – Finishing operations total cost 530,000 Activity 3 – Material handling total costs 130,000 Activity 4 – Packaging and shipping costs 100,000 Activity 5 – Production setup total costs 80,000 Activity 6 – Production scheduling total costs 60,000 $2,700,000 The most appropriate cost drivers for the six activities have been identified as: machine hours, direct labour hours, number of parts, number of orders shipped, number of production setups, and number of production orders respectively. B