CCB Sofa Company mainly produces and sells sofas. The company has two main product lines: ordinary sofas and luxury sofas. Its products are sold through wholesalers. Due to the intense competition in recent years, the company is now facing two major problems. First, the ordinary sofa is a high-volume product, but its price is higher than other companies' products of the same type, so it has lost a lot of sales in recent years. Second, sales of highmargin luxury sofas are also declining. At the recent business meeting, the vice president of marketing believed that the profit per unit of luxury sofas was higher, so he requested to strengthen the production and sales of luxury sofas. Costs have always been underestimated. He believes that cost drivers can better reflect the consumption of operating resources by various products, so he counter-recommends that companies use multiple cost drivers to analyze manufacturing overhead to make a more accurate allocation. After the meeting, the company president didn't know he should take the advice of the vice president of marketing or the plant manager, so the company hired a consultant to address these issues. The company's current policy is only to adopt the traditional cost system, which allocates manufacturing overhead to products based on direct labor costs. To control costs, the consultant recommends using Activity-Based Costing to allocate overhead. The following information was used by the consultants:

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Product direct cost information: Price per $140 product Annual Direct material Direct labor per output per unit unit unit Ordinary sofa 80,000 $20 $10 $80 luxury sofa 8.000 $40 $16 Activity-based costing data and cost drivers: cost pool normal cost sharing cost driver luxury basis type sofa Estimated sofa number of machine machine hours 20,000 hours 17,000 3,000 hours running hours Support labor direct labor $928,000 $800,000 $128,000 costs cost Machine curb hours 5.000 hours 3,000 hours 2,000 hours preparation assemble number of 805,000 pieces 420,000 385,000 parts pieces pieces an Check hours 8,000 hours 4,800 hours 3,200 hours examination Indirect manufacturing overhead and operation consumption information: cost pool machine running Support labor costs Machine preparation assemble an examination total overhead Indirect manufacturing cost $354,000 $185,600 $98,350 $169,050 $121,000 $928,000 Require: 1. Calculate the total manufacturing cost and unit manufacturing cost of the two products using traditional costing ( 10 points) 2. Using the activity-based costing system, calculate the estimated overhead cost allocation rate for each type of overhead overhead, as well the total manufacturing cost and unit manufacturing cost of the two products. ( 26 points) 3. Are luxury sofas as profitable under ABC as the VP of Marketing thinks? Try to make comments and explain why. as