Bowman Specialists Inc. (S) manufactures specialized equipment for polishing optical lenses. There are two models- one (A-25) principally used for fine eyewear and the other (A-103 for lenses used in binoculars, cameras and similar equipment Required: 1. Calculate the product cost and product margin for each product 2. A new competitor has entered the market for ens polishing equipment with a superior product at significantly lower prices. $2,110 for the A-10 model and $1,610 for the A-25 model. To try to compete, BSI has made some radical improvements in the design and manufacturing of its two products. The materials costs and activity usage rates have been decreased significantly, as follows: The following table shows the manufacturing cost of each unit is calculated, using activity based costing, for these manufacturing cost pools. Cost Pools Materials handling Manufacturing supervision Assembly Allocation Base Costing Rate Number of parts $ 3.60 per part Hours of machine 24.48 per time ** hour Number of parts $ 5.25 per part Each setup setup Logged hours $62.00 per 0 hour Logged hours $33.ee per hour A-19 Direct materials $96.65 Number of parts 128 Machine-hours 9.5 Inspection time 1.9 Packing time 0.97 Setups 10 A-25 $51.45 99 3.8 0.95 .38 10 $48.2e per Machine setup Inspection and testing Packaging 2-a. Calculate the total product costs with the new activity usage data. 2-b. Can BSI make a positive gross margin with the new costs, assuming that it must meet the price set by the new competitor? 4. What cost management method might be useful to BSI at this time? BSI currently sells the A-10 model for $2,990 and the A-25 model for $1765. Manufacturing costs and activity usage for the two products follow: Complete this question by entering your answers in the tabs below. A-10 $140.76 A-25 $75.44 Reg 1 Req 2A Req 2B Req 4 130 101 Direct materials Number of parts Machine hours Inspection Calculate the product cost and product margin for each product. (Round your answers to 2 decimal places.) 8.70 5.80 1.05 1.99 A-10 A-25 time Packing time Setups 1.15 0.58 2010 Product cost Product margin Reg 2A >