how do I answer this

A H M 0 1 $ $ F Product Data Model A 20,000 600,000.00 $ 100,000.00 $ 140,000 20,000 40 600 9,000 Model B 200,000 6,000,000.00 1,000,000.00 300,000 180,000 160 1,400 81,000 14 $ $ $ $ $ 160,000.00 180,000.00 140,000.00 180,000.00 660,000.00 Model A Model B 2 3 Units produced & sold per year 4 Sales Revenue 5 Prime Cost 6 # of Direct Labor Hours 7 # of Machine hours 8 # of Set Ups 9 # of Inspection runs 10 # of packing orders 11 12 Manufacturing Overhead Costs: 13 Machining Setup costs 15 Inspection costs 16 Packing Costs 17 Total 18 19 Simple Cost Allocation 20 Plant-wide MOH Rate 21 22 Allocated MOH 23 24 Direct Materials & Direct Labor 25 Allocated MOH 26 Total Product Costs 27 28 Product Cost (CGS) per unit 29 30 Selling Price per unit 31 CGS per unit 32 Gross Profit per Unit 33 34 35 Activity-Based Costing 36 37 Machining 38 Setup costs 39 Inspection costs 40 1 Packing Costs 41 42 Allocated MOH 43 44 Direct Materials & Direct Labor 45 Allocated MOH 46 Total Product Costs 47 48 Product Cost (CGS) per unit 49 50 Selling Price per unit 51 CGS per unit 52 Gross Profit per Unit Model A Model B Activity Rates 53 54 55 Departmental MOH Rates: $ 56 $ 2.75 Department 1 Fabrication Machine Hours 55,000 145,000 57 1.25 Department 2 Assembly Direct Labor Hours 110,000 330,000 58 59 Model A Model B 60 61 A B F G H J L M N O P Q R S T U V W C 145,000 E 350,000 59 Model B 60 61 Model A Model B 62 Departmental OH Allocation Direct Materials & Direct Labor Allocated MOH Dept 1 Allocated MOH Dept 2 Total Product Costs Product Cost (CGS) per unit 63 64 65 66 67 68 69 70 71 72 73 74 75 76 Selling Price per unit CGS per unit Gross Profit per Unit 77 78 Compare the results for the simple cost allocation system (plant-wide) with that of an ABC system. Plant wide Departmental Activity Based Model A elling Price per unit CGS per unit Gross Profit per Unit Model B Selling Price per unit CGS per unit Gross Profit per Unit 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 Which do you think is more accurate and why? What circumstances would favor Ramsey adopting ABC as their allocation method? Ramsey Company produces speakers (Model A and Model B). Ramsey's controller, Mr. Jacks, is evaluating the different methods of allocating manufacturing overhead to the products. 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 more popular of the two speakers. The following data have been gathered for the two products. Units produced & sold per year Sales Revenue Prime cost Direct Labor Hours Machine hours Set Ups Inspection runs Packing Orders Estimated Manufacturing Overhead: Machining costs Setup costs Inspection costs Packing costs Total Manufacturing Overhead Product Data Model A Model B 20,000 200,000 $600,000.00 $6,000,000.00 $100,000.00 $1,000,000.00 140,000 300,000 20,000 180,000 40 160 600 1,400 9,000 81,000 $160,000.00 $180,000.00 $140,000.00 $180,000.00 $660,000.00 1) Compute the product cost per unit and the gross profit per unit for each product by using a simple cost allocation method (plant-wide rate) based on direct labor hours. Round your final answers to two decimal places. 2) Compute the product cost per unit and the gross profit per unit for each product by using Activity-Based costing (ABC). Round your final answers to two decimal places. Suppose that Ramsey decides to use departmental overhead rates. There are two departments: Department 1 (machine intensive) with an MOH rate of $2.75 per machine hour and Department 2 (labor intensive) with an MOH rate of $1.25 per direct labor hour. The actual consumption of these two drivers is as follows: Department 1 Fabrication Machine Hours 55,000 145,000 Department 2 Assembly Direct Labor Hours 110,000 330,000 Model A Model B 3) Compute the product cost per unit and the gross profit per unit for each product by using the departmental MOH rates. Round your final answers to two decimal places. 4) Compare the results for the simple cost allocation system (plant-wide), departmental cost allocation and the ABC cost allocation systems. Which do you think is more accurate and why? What circumstances would favor Ramsey adopting ABC as their allocation method (provide at least three reasons)