1. What are the main advantages and disadvantages of the activity-based costing system? List and describe three main advantages and three main disadvantages. $4 2. The Western Corporation manufactures a single product and has provided the following data for its most recent year of operations: Selling price per unit $68 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $10 Direct labor $6 Variable manufacturing overhead Fixed manufacturing overhead per year $220,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold Fixed selling and administrative expense per year $61,000 During the year, 11,000 units were produced, and 10,000 units were sold. There was no beginning inventory a. Prepare an income statement to find the company's net operating income under variable costing b. Prepare an income statement to find the company's net operating income under absorption costing. c. Using a different method (without preparing an income statement), find the company's net operating income under absorption costing. $6 3. Borleau Corporation has an activity-based costing system with three activity cost pools-- Supporting direct labor, Setting up machines, and General factory. The company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,700 units of Basic Product and 1,100 units of Deluxe Product The estimated overhead costs and expected activity for next period are as follows: Activity Cost Pools and Estimated Expected Activity Activity measures Overhead Costs Basic Deluxe Product Product Supporting direct labor $30,528 1,000 600 (DLHS) Setting up machines $17,385 1,700 (setups) General factory (MHS) $50.872 660 Total $98.785 200 510 a. Calculate the activity rate for each activity cost pool using activity-based costing, b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing