(214(20 marks} ABC company employs a traditional costing system and applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours. The company has two products, AR and BS, about which it has provided the following data: AR BS Direct materials per unit S 19.80 $ 57.90 Direct labor per unit 5 25.60 $ 64.40 Direct labor-hours per unit 0.20 2.40 Annual production [units] 30,800 22,000 The company's estimated total manufacturing overhead for the year is $3,485,185 and the company's estimated total direct labor-hours for the year is 74,360. Xi'an JIaotong-leerpool University @ o i #110551 5% The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Estimated Overhead Cost Supporting direct labor {direct labor-hours! S 817,960 Setting up machines [setups] 648,985 Parts administration (part types] 2,018,240 Total W Activities drivers AR 35 Total Supporting direct labor 21,560 52.800 74.360 Setting up machines 88? 3,300 4,187 Parts administration 2,430 1,810 4,240 {For all requirements. round your intermediate calculations and final answers to 2 decimal places.) Required: a. {2 marks} Determine the unit product cost of each of the company's two products under the traditional costing system. b. (10 marks} Determine the unit product cost of each of the company's two products under activity- based costing system. c. (8 marks} By giving examples, please explain why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs