At its manufacturing plant in Duluth, Minesota, EndoElectronics Company Manufactures two products, X21 and Y37. Formany years, the company has used a simple plantwide manufacturingsupport cost rate based on direct labor hours. A new plantAccountant suggested that the company may be able to assign supportcosts to products more accurately by using an activity basedcosting system that relies on a separate rate for eachmanufacturing activity that causes support costs. The plantaccountant has collected the following data for last year:

Items: ProductX21 Product Y37

Units produced and sold50,000 .Units produced and Sold:100,000

Direct labor hours used100,000 Directlabor hours used: 300,000

Direct labor cost1,000,000 Direct labor cost: 4,500,000

Number of times handled40,000 Number of times handled: 20,000

Number of parts12,000 Number of parts: 8,000

Number of design changes2,000 Number of design changes: 1,000

Number of product setups8,000 Number of product setups: 6,000

The account has also determined the actual manufacturingsupport costs incurred last year:

Costpool: Activity Costs

Handling 3,000,000

Number ofparts 2,400,000

DesignChanges 3,300,000

Setups 2,800,000

Total 11,500,000

The direct materials cost for product X21 is $120 per unit andY37 is $140 per unit.

A: Determine the unit cost of each product using direct laborhours to allocate all manufacturing support costs.

B: Determine the unit cost of each product using activitybased costing

C: Which of the two methods produces more accurate estimatesof job costs. Explain