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I do not know how to answer this excersice Assign P5-48B overhead costs International Steel Company has budgeted manufacturing overhead costs of $2,500,000, It using

I do not know how to answer this excersice

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Assign P5-48B overhead costs International Steel Company has budgeted manufacturing overhead costs of $2,500,000, It using traditional has allocated overhead on a plant-wide basis to its two products (Standard Steel and Deluxe Steel) using machine hours, which are estimated to be 100,000 for the current year. The costing and ABC; company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: compare results. Activity Centre Cost driver Estimated Overhead Expected Activity Material Number of moves $250,000 50,000 moves handling Purchase orders Number of orders $200,000 4,000 orders Product testing Number of tests $450,000 9,000 tests Machine sct-up Number of set-ups $600,000 6,000 set-ups Machining Machine hours $1,000,000 100,000 machine hours Each unit of the products requires the following Standard Steel Deluxe Steel Direct materials costs $200 $250 Direct labour costs $100 $120 Purchase orders 2 3 Machine set-up 5 10 Product testing 3 4 Machining 50 50 Materials handling 10 Instructions (a) Under traditional product costing using machine hours, calculate the total manufacturing cost per unit of both products. (b) Under ABC, prepare a schedule showing the calculation of the activity-based overhead rates (per cost driver). (c) Calculate the total manufacturing cost per unit for both products under ABC. (d) Write a memo to the president of the company discussing the implications of your analysis for the company's plans. In this memo, provide a brief description of ABC, as well as an explanation of how the traditional approach can result in distortions

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