5-27 ABC, simple costing systems. Caleb Enterprises Ltd. manufactures electrical cables for households and industries. The company has identified the following overheads activities, costs, and activity drivers for the coming year. Activity Expected Cost Activity Driver Activity Capacity Setup costs E 50,000 Number ofsetups 400 Placement costs 50,000 Number of placements 5.300 Machine costs 100,000 Machine-hours 20.000 Customer service 33,000 Complaints received 25.000 The company's normal activity requires 8,500 direct labor-hours. The following two electrical cables were manufactured during the year: Industrial Cable Household Cable Direct material 950 1,200 Direct labor [7|] hours per cable) 820 E 700 Variable overhead cost 500 E 250 Units produced 200 120 Number of placements 8 12 Number of setups 1 2 Machine-hours 25 45 Complaints received 33 56 1. Compute the unit cost for each cable using direct labor hours to apply the manufacturing overheads. 2. Compute the unit cost for each job using the ABC system. 3. What is the advantage of using a simple and ABC systems by Caleb Enterprises Ltd's management