Colonial Company Manufactures Decorative Wall Clocks and Uses Activity-Based Costing

Multiple Choice

Colonial Company manufactures decorative wall clocks and uses activity-based costing.Each clock consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce.Additional information is as follows: What is the cost of materials handling per clock?

A) $0.08.
B) $1.60.
C) $6.00.
D) $5.00.
E) $7.20.