Each Tool Manufactured by Allen Corp

Each tool manufactured by Allen Corp. requires one direct labor hour (DLH) of assembly at $9 per DLH. Allen applies overhead at a rate of 20% of total direct material costs. Allen's direct material cost fluctuates by volume as follows:

If Allen produced 3,500 tools in 2010, what is the total cost of 2010 production?

A) $32,844
B) $37,100
C) $38,940
D) $39,060
E) $56,700