Sanchez has developed the following product activity cost pool information for this year:

Actual information follows for Standard Product A, Standard Product B, and Specialty Products:

a. Determine the total unit cost of each product if the indirect costs are determined based on the number of units produced using the following chart.

b. Determine the total unit cost of each product if the indirect costs are determined based on the number of machine hours using the following chart.

c. Determine the total unit cost of each product if the indirect costs are determined based on the number of customers using the following chart.

d. Determine the total unit cost of each product if the indirect costs are determined based on the preceding ABC information using the following charts.

e. Explain why in item (d), the total unit cost of the Specialty Products is so much higher than the total unit cost of Standard Product A or Standard Product B using ABC. Be specific.

f. Could management use the information gathered on the activities to learn about what is done and suggest improvements? For example, suppose descriptive analytics reveal that materials are not delivered on time and workers are not properly trained, which could cause setups to be inefficient. If you were on the ABC team, which questions would you ask the employees regarding activities other than setups to identify inefficiencies? Elaborate.

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Activity Direct tracing Purchasing and material handling Product design Setups Running machines Inspection Rent, storage, and occupancy Packaging Customer handling Total indirect costs Budgeted Cost $305,000 $120,000 $90,000 $80,000 $200,000 $45,000 $100,000 $26,000 $29,000 $690,000 Total Budgeted Activity Cost Driver 12,000 Number of pounds of materials 600 Number of design changes 400 Number of setups 20,000 Number of machine hours 1,500 Number of batches 10,000 Number of square feet 2,600 Number of units 2,900 Number of customers