1. Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer intem has suggested that the cost system might be providing misleading information. The controller decided that a good summer project for the intem would be to develop, in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intem identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: Cost Pools Costs Activity Drivers Receiving $ 600,000 Direct material cost Manufacturing 5,500,00 Machine-hours 0 Machine setup 900,000 Production runs 1,000,00 Shipping Units shipped 0 In this particular area, Cain produces two of its many products: Standard and Deluxe. The following are data for production for the latest full year of operations, Total direct material costs $ 0 Products Standard Deluxe $ 245,00 155,00 0 $ 650,00 $ 250,00 0 0 150,00 100,00 0 0 Total direct labor costs Total machine-hours Total number of setups 75 125 Total pounds of material 18,000 9,000 Total direct labor-hours 6,000 3,750 Number of units produced and shipped 20,000 5,000 W Required: a. The current cost accounting system charges overhead to products based on machine bours. What unit product costs will be reported for the two products if the current cost system continues to be used? b. The intem suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products if the ABC system is used