3. In which product costs, those in requirement 1 or those in requirement 2, do you have the most confidence? Why? 4-BI Direct, Indirect, and Unallocated Costs Cambridge Tool Co. is a supplier that assembles purchased parts into components for three distinct markets-scoote ing income for the most recent period: r parts, lawn mower parts, and hand tool parts. Following is the statement of operat- Cambridge Tool: Statement of Operating Income Total $1,221,500 Sales Cost of goods sold $410,000 60,000 Direct material rect production (allocated based on machine hours) Gross profit 470,000 751,500 seling and administrative expenses: Commissions 73,900 nbution to warehouses (allocated based on weight in kilograms) 135000 208,900 542,600 Income before unallocated expenses Unallocated expenses Corporate salaries 10,000 27.000 515,600 17.000 er general expenses perating income before taxes nting system are as follows: ge Tool uses a traditional cost accounting system. Operating data used in the cost Hand Tool Parts Lawn Mower Parts $175,000 Scooter Parts $90,000 chase cost of parts assembled Machine hours $145,000 8,950 60,000 1,650 1.400 505,000 110,000 kparts shipped to distributors 3. In which product costs, those in requirement 1 or those in requirement 2, do you have the most confidence? Why? 4-BI Direct, Indirect, and Unallocated Costs Cambridge Tool Co. is a supplier that assembles purchased parts into components for three distinct markets-scoote ing income for the most recent period: r parts, lawn mower parts, and hand tool parts. Following is the statement of operat- Cambridge Tool: Statement of Operating Income Total $1,221,500 Sales Cost of goods sold $410,000 60,000 Direct material rect production (allocated based on machine hours) Gross profit 470,000 751,500 seling and administrative expenses: Commissions 73,900 nbution to warehouses (allocated based on weight in kilograms) 135000 208,900 542,600 Income before unallocated expenses Unallocated expenses Corporate salaries 10,000 27.000 515,600 17.000 er general expenses perating income before taxes nting system are as follows: ge Tool uses a traditional cost accounting system. Operating data used in the cost Hand Tool Parts Lawn Mower Parts $175,000 Scooter Parts $90,000 chase cost of parts assembled Machine hours $145,000 8,950 60,000 1,650 1.400 505,000 110,000 kparts shipped to distributors