P25-2A MacArthur. Inc., manufactures CD racks and uses an activity-based costing system. MacArthur's activity areas and related data follow. Budgeted Cost Activity of Activity Allocation Base Cost Allocation Rate Materials handling Assembling Finishing $ 200,000 3,000,000 160.000 Number of parts $ 0.30 Direct labor hours 18.00 Number of finished units 5.00 MacArthur produced two styles of CD racks in April-the standard rack and an unfinished rack, which has fewer parts per rack and requires no finishing. The totals for quantities, direct materials costs, and other data follow. Total Product Total Units Produced Direct Materials Total Number Total Assembling Direct Labor Costs of Parts Hours Standard CD rack Unfinished CD rack 2,500 3,500 $24,000 30,000 3,000 27,000 36,000 2,800 Required 1. Compute the manufacturing product cost per unit of each type of CD rack. 2. Suppose that premanufacturing activities, such as product design, were assigned to the standard CD racks at $4 each and to the unfinished racks at $3 each. Similar analyses were conducted of postmanufacturing activities such as distribution, marketing, and cus- tomer service. The postmanufacturing costs were $18 per standard rack and $13 per unfinished rack. Compute the full product costs per unit. 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference. 4. What price should MacArthur's managers set for unfinished racks to earn a unit profit of $15?