A Corporation is currently operating at a loss and has prepared a product margin analysis for its two products, A2 and A1 (Table #2). The Corporation produced and sold 5,000 units at $35 per unit of A2 and 11,000 units at $15 of A1 during the current year. Selling and administrative costs were $80,000 The following table (Table #1) has been prepared to allocate overhead to each product using Activity-based Costing. The allocation base used to assign overhead to the products is in parenthesis. Table #1 A2 A1 $ 33,904 8,512 $7,676 448 Total $ 41,600 8.960 Activity Cost Pools Machining (machine hrs) Setting Up (# of setups) Overhead assigned to products Org-sustaining costs Total overhead $ 42,416 $ 8,144 50,560 11,440 $ 62,000 ZOOT Table #2, Product Margin Calculation Traditional Method Sales A2 A1 Direct materials $ 175.000 $ 165,000 40,080 65.760 Direct labor Overhead (using DLS as allocation base) Total cost 85,520 80,680 31.903 157,503 Product Margin Product margin per unit $17.497 30.097 (176.537) $(11.537) $(1.05) $3.50 ABC Costing Method A2 A1 Sales $ 175,000 $ 165,000 Direct materials 40,080 65,760 85,520 80,680 Direct labor Overhead assigned to products 42,416 8,144 Variable selling expense 10,000 5,000 Total cost 178,016 159,584 Product margin $ (3,016) $5,416 Product margin per unit $(0.60) $0.49 Requirements: Answer the following questions fully and completely. in your own words, to receive full credit. (Note: a one sentence answer is unlikely to earn full points.) A. As a manager, what conclusions can you draw from the results of the product analysis using traditional costing? Include any problem areas you see and any actions management should take. B. As a manager, what conclusions can you draw from the results of the product analysis using activity based costing? Include any problem areas you see and any actions management should take. C. List the primary reasons that cause the difference in results between when using the traditional method and when using ABC for computing a product margin