AA Ltd makes two products, in a factory divided into two production departments, Machining and Assembly. In order to find a fixed overhead cost per unit, the following budgeted data is relevant:

                                            Machine         Assembly

Allocated and apportioned fixed costs:            $120000          $72000

Labor hours per unit –A :                       0.5 hour          0.2 hour

                    –B :                    1.0 hour          0.25 hour                                   

Budgeted production is 4,000 units of each product (8,000 units in all) and fixed overheads are to be absorbed by reference to labor hours.

What is the budgeted fixed overhead cost of a unit of A?

B.   $17

C.   $18

D.   $19