Strickland Co. currently charges manufacturing

Strickland Co. currently charges manufacturing over-head costs to products using machine hours. However, company management believes that the use of ABC would provide more realistic cost estimates and, in turn, give the company an edge in pricing over its competitors. Strickland’s accountant and production manager have provided the following budgeted information for 2014, given a budgeted capacity of 1,000,000 machine hours:
A national construction company approached Pete Lang, the VP of marketing, about a bid for 2,500 doors. Lang asked the cost accountant to prepare a cost estimate for producing the 2,500 doors

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