At its manufacturing plant in Adelaide, Exxon Electronics Company manufactures two products, A32 & Y41. For many years, the company has used a simple plantwide manufacturing overhead cost rate based on direct labour hours. A new plant accountant suggested that the company may be able to assign overhead costs to products more accurately by using an activity-based costing system that relies on a separate rete for each manufacturing activity that causes overhead costs.

After studying the plant's manufacturing activities and costs, the plant accountant has collected the following data for the last year.

Item A32 Y41 Units produced and sold 50,000 100,000 Direct labour hours used 100,000 300,000 Direct Labour cost $1,000,000$4,500,000 Number of times handled 40,000 20,000 Number of parts 12,000 8,000 Number of design changes 2,000 1,000 Number of product setups 8,000 6,000 0The accountant has also determined that actual manufacturing overhead cost incurred last year were as follows: Cost Pool Activity Costs Handling $3,000,000 Number of parts $2,400,000 Design changes $3,300,000 $2,300,000 Total $11,500,000 The direct material cost for product A32 is $120 per unit, while for product Y41 it is $140 per unit