EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product linesthe highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows:

	Factory Costs
Salaries	$	850,000
Supplies		150,000
Factory expense		550,000
	$	1,550,000

EEI uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging.

	Setup			Assembly			Inspecting and Finishing			Packaging			Total
Salaries		15	%		55	%		20	%		10	%		100	%
Supplies		20			60			20						100
Factory expense					80			20						100

The activity cost drivers for the two products are summarized below.

Activities	Activity Driver
Setup	Batch
Assembly	Units
Inspect and finishing	Finishing hours
Packaging	Packing hours

	Safe-V			Safe-T
Batches		250			600
Units		60,000			72,000
Finishing hours, per unit		0.20			0.30
Packaging hours, per unit		0.10			0.15
Materials per unit	$	3.50		$	6.00

Required:

Determine the amount of the cost pool for each of the four activities.

Determine the activity-driver rates for assigning factory costs to the two products.

Determine the activity-based unit cost for each of the products.

What is the strategic role of the information obtained in the previous question

The quantities of resource consumption cost drivers used were based on rough estimates. Under what conditions would you recommend that more accurate cost driver data be collected?