1) ABC Manufacturing Inc. is a long established company and they use activity based costing (ABC). The company has five activity cost pools and two products (Item 1 and Item 2). The company and product estimated information is as follows: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Overhead Orders $ 130,000 Setups 297,000 Machine hours 1,000,000 Parts 1,600,000 Inspections 300,000 Cost Drivers by Item Item 1 Item 2 600 400 500 400 150,000 100,000 1,200,000 800,000 550 450 Instructions a) Calculate the overhead cost per unit for Item 1 and Item 2. Production is 680,000 units of Item 1 and 220,000 units of Item 2. b) The overhead includes fixed and variable costs. If 80% of the total overhead is variable, how is the total overhead impacted if Item 2 is no longer manufactured by the company