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:

despite recent priceincreeses A summer intern hes suggested that the cost system mihtbe pridrg misleeding information The controler deckled that a good summer piroject for the imern would be to devalop, in one salt-contained area ot the plant, an aternative cost system with which to compara the cumant system The intam identified the tollowing cost pools and, atter discussion with some plant parsonnel, approprnate cost driwers for each pool Thara wane Recaving S 25,000 Drect mater al cost 10,000.000 Machine-hour S 1,375.000 Units shipped Wachine sohup Shppoing In this particular ares, Cain preduces two of its many products: Standard and Deuxe. The following are data for production for the latest full year of operations Prcducts 400 000 0,000 $800,000 Total mectine hours Total number of ztups Trial p(inds , material Tutal drect Isbur-hours Number of unts produced and shipped 230,000 79.000 5,000 Raquired: Drect oosts otal cois b The intern guggests B C gyelem using the osi divers der ilie bove. Wlhat unit produc o ses il bereported ror two products the A systern is used? o noteound intermediule calculutions. Ovethead. Machina schip 3hipping Number ot unts Unil cusl