ATM Manufacturing produces two types of products: Deluxe and Standard. The original allocation basis for overheads has been direct labor hours. For 2019, ATM compiled the following data for the two products: Deluxe Standard Sales units 500 800 Sales price per unit $650 $700 Direct material costs per unit $210 $135 Direct labour costs per unit $160 $110 Direct labour hours per unit 4 2 Last year, ATM purchased an expensive robotics system to allow for more complex products in their production lines. The CFO suggested that an Activity- Based Costing (ABC) analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2019: Total Activity Level Activity Cost Driver Company Cost Deluxe Standard Company Setups #setups $ 60,000 800 200 1,000 Machine-related # of machine hours $54,000 60,000 60,000 120,000 Packing #shipments $ 75,000 1,000 4,000 5,000 Required: (a) Calculate the total unit costs of Deluxe and Standard if traditional method is still used by the company. (b) Using the activity-based costing data presented above and compute ABC's total cost to manufacture each unit of Deluxe and Standard. (c) Identify and explain the problems that the company may face if they keep using the traditional method. (d) Explain briefly why do some companies prefer traditional method to Activity-based Costing method