Huron Furniture is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool.

Cost Pools	Costs			Activity Drivers
Utilities	$	372,000		62,000	machine-hours
Scheduling and setup		330,400		560	setups
Material handling		825,000		1,650,000	pounds of material

The company manufactures three models of tables (oval, round, and square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows:

	Products
	Oval			Round			Square
Total direct costs (material and labor)	$	70,000		$	90,000		$	80,000
Total machine-hours		34,000			9,000			19,000
Total number of setups		70			280			210
Total pounds of material		500,000			350,000			800,000
Total direct labor-hours		3,400			1,900			4,500
Number of units produced		3,800			1,900			6,000

Required:
(a)	The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used?(Do not round intermediate calculations. Round your final answers to nearest dollar amount. Omit the "$" sign in your response.)

Product	Unit cost
Oval	$
Round	$
Square	$

(c)	What are the cost driver rates for the three cost pools identified by the cost accountant? (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Utilities	$	per machine-hour
Scheduling and setup	$	per setup
Material handling	$	per pound

(d)	What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? (Do not round your intermediate calculations. Round your final answers to 2 decimal places. Omit the "$" sign in your response.)

Product	Unit cost
Oval	$
Round	$
Square	$

(e)	If management should decide to implement an activity-based costing system, what benefits should it expect? a) increase the sales of the company or b) provided with a more thorough understanding of product costs