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Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered

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Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer Intern has suggested that the cost system might be providing misleading Information The controller decided that a good summer project for the Intern would be to develop. In one self-contained area of the plant, an alternative cost system with which to compare the current system. The Intern Identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: Cost Pools Activity Drivers Receiving 600,000 Direct material cost Manufacturing 5,500,000 Machine setup 980, eee Production runs Shipping Units shipped Costs $ Machine-hours 1,000,000 In this particular area. Cain produces two of its many products: Standard and Deluxe. The following are data for production for the latest full year of operations, Total direct material costs Total direct labor costs Total machine-hour's Total number of setups Total pounds of material Total direct labur-hour's Nunber of units produced and shipped Products Standard Deluxe $ 240,000 $160, eee $668,888 $ 260,000 148.000 182.eee 88 120 17.500 9.500 6,058 3,880 19.ee 6,000 ired: me current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be rted for the two products if the current cost system continues to be used? he Intern suggests an ABC system using the cost drivers Identified above. What unit product costs will be reported for the two Cucts If the ABC system is used

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