. Anemos (A): 8,000 units of annual sales Pagos (P): 15,000 units of annual sales Hydatos (H): 4,000 units of annual sales The company uses a traditional, job-order product costing system with production overhead applied on the basis of direct labor hours. The total product costs under this job-order costing system have been computed as follows: Direct Material Direct Labor Manufacturing OH Total Product Cost $ $ $ $ Anemos 280,000 128,000 1,120,000 1,528,000 $ $ $ $ Pagos 787,500 180,000 1,575,000 2,542,500 Hydatos $ 70,000 $ 32,000 $ 280,000 $ 382,000 Direct labor costs are estimated at $20.00 per direct labor hour. Eureka's pricing method has been to set a target price equal to 150% of full product cost. However, Eureka has experienced some unexpected price competition for some of its products. Eureka's controller is considering a switch to activity-based costing in light of these pricing concerns. She has gathered the following data which identifies produce-level usage of current overhead costs: A P H Total Activity Cost Pool Machine Setup Machinery Inspection Engineering Pool Costs Cost Driver ($) 230,000 # of setups 1,545,000 Machine Hrs. 725,000 # of Inspections 325,000 # of Changes 400 5,000 150 70 600 12,500 450 20 1,000 2,000 7,500 25,000 400 1,000 110 200 A. Calculate the predetermined overhead rate Eureka uses for its job-order costing system. (6) B. What is the unit cost of each product under the traditional job-order costing system? (8) C. Calculate the activity rate for inspections? (4) D. Using ABC costing, what is the unit cost for each product? (10) E. Indicate whether each product is undercosted or overcosted by the traditional costing system. Why does the traditional costing system under/overcost these products? (8)