5 Activity-based job costing, unit cost comparisons. The Tracy Corporation has a machining facility specializing in jobs for the aircraft components market. The prior job costing system had two direct cost categories (direct materials and direct manufacturing labour) and a single indirect cost pool (manufacturing overhead, allocated using direct labour-hours). The indirect cost allocation rate of the prior system for 19.8 would have been $115 per direct manufacturing labour-hour. Recently, a team with members from product design, manufacturing, and accounting used an activity-based approach to refine its job costing system. The two direct cost categories were retained. The team decided to replace the single indirect cost pool with five indirect cost pools. These five cost pools represent five activity areas at the facility, each with its own supervisor and budget responsibility. Pertinent data are as follows: Information-gathering technology has advanced to the point where all the data necessary for budgeting in these five activity areas are automatically collected. Two representative jobs processed under the new system at the facility in the most recent period had the following characteristics: REQUIRED 1. Compute the per unit manufacturing costs of each job under the prior job costing system. 2. Compute the per unit manufacturing costs of each job under the activitybased job costing system. The budgeted manufacturing overhead for IV At the end of 19.7, Jonathan Davis, the controller of BD, decided to investigate how use of an activity-based costing system would affect the product cost numbers. After consulation with operating personnel, the single manufacturing overhead cost pool was subdivided into five activity areas. These activity areas, their driver, their 197 budgeted rate, and the driver units used per kilogram of each cake are as follows: Itroutati: 1. Compute the 19.7 unit product cost of raisin cake and layered carrot cake with the normal costing system used in the 19_5 to 19 -7 period. 2. Compute the 19.7 unit product cost per cake under the activity-based normal costing system. 3. Explain the differences in unit product costs computed in requirements 1 and 2 . 4. Describe three uses Baker's Delight might make of the activity-based cost numbers