DHA Pharmaceutical Company produces three drugs: Diomycin, Homycin, and Addolin. Since its inception four years ago. DHA has used direct labor hours (DLHS) to assign manufacturing overhead costs to products. The president has just read about activity-based costing in a trade journal. She asked her financial controller. John Morrison to examine differences in product costs between the current costing and activity-based costing, DHA has the following budget information for the most recent year: Diomycin Homycin Addolin Cost of direct materials $ 205,000 265,000 258,000 Cost of direct labors 250.000 234,000 263.000 Number of direct labor hours 7,200 6,800 2.000 Number of capsulates 1,000,000 500,000 300,000 $ $ $ $ $ Activity Cost driver Machine setup Plant management Supervision of direct labor Quality inspection Expediting orders Total overhead Setup hours Workers DL hours Inspection hours Customer served Budgeted overhead Budgeted cost cost driver volume $ 16,000 1.600 $ 36,000 1,200 $ 46,000 1.150 $ 50,400 1.050 5 51.600 645 $ 200,000 John gathered the following information about the cost driver volume for each product: John gathered the following information about the cost driver volume for each product: Activity (cost driver) Diomycin Homycin Addolin Machine setups (setup hours) 200 600 800 Plant management (number of workers) 200 400 600 Supervision of direct labor (DLHS) 200 300 650 Quality inspection (inspection hours) 150 200 700 Expediting orders (# customers served) 45 100 500 Required: (Be sure to show supporting calculations, as needed to receive credit) 1. (5 points) Using the current costing system, calculate the overhead cost per unit for each product. 2. (12 points) Using the ABC system, calculate the overhead cost per unit cost for each product. 3. (4 points) The two costing systems provide different results. Discuss why the differences occur. Be sure to make some references to your calculations in (1) and (2)