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How do I answer problem 5-54 in Managerial Accounting: The cornerstone of business decision making (7th edition) by Mowen/Hansen/Heitger. The correct problem is in the

How do I answer problem 5-54 in Managerial Accounting: The cornerstone of business decision making (7th edition) by Mowen/Hansen/Heitger. The correct problem is in the textbook solutions but the solution makes no sense.

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Problem 5-54 Plantwide versus Departmental Rates, Product-Costing Accuracy: Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensive than that of Model B. Model B is also the more popular of the two speakers. The following data have been gathered OB Activity-Based Costing Anca & the E E for the two products: fies Product Data Model A Model B 10,000 100,000 $150,000 $1,500,000 140,000 300,000 20,000 200,000 40 60 800 1.200 10,000 90,000 Units produced per year Primc costs Direct labor hours Machine hours Production runs Inspection hours Maintenance hours Overhead costs: Setup costs Inspection costs Machining Maintenance Total bor in. $270,000 210,000 240,000 270,000 $990,000 Required: 1. Compute the overhead cost per unit for each product by using a plantwide rate based on direct labor hours. (Note: Round to two decimal places.) 2. Compute the overhead cost per unit for each product by using ABC. (Note: Round rates and unit overhead cost to two decimal places.) 3. Suppose that Ramsey decides to use departmental overhead rates. There are two departments Department 1 (machine intensive) with a rate of $3.50 per machine hour and Department 2 (labor intensive) with a rate of $0.90 per direct labor hour. The consumption of these two drivers is as follows: Department 1 Machine Hours 10,000 170,000 Department 2 Direct Labor Hours 130,000 270,000 Model A Model B Compute the overhead cost per unit for each product by using departmental rates. (Note: Round to two decimal places.) 4. CONCEPTUAL CONNECTION Using the activity-based product costs as the standard, comment on the ability of departmental rates to improve the accuracy of product costing, Did the departmental rates do better than the plantwide rate

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