International Stone produces two types of engineered stone - Stone A and Stone B. It expects to produce 500 tons of stone A and 4,000 tons of stone B in the upcoming year and has budgeted manufacturing overhead costs of $1,890,000. It has always allocated manufacturing overhead to all its products using machine hours, which are estimated to be 180,000 machine hours for the current year. The CEO has provided you with the following comment: " Our competition is producing Stone B at $275 per ton. From the looks of it our manufacturing costs are higher than that. How can we compete? Do you think production of stone B should be discontinued? That means we will have to close part of the factory and lay off 100 workers." You decide you will experiment with activity-based costing. After some digging you create five activity pools and related activity cost drivers as follows. Stone A Stone B Tons of stone produced 500 tons 4,000 tons Direct materials cost $300,000 $400,000 Direct labour costs $120,000 $120,000 Activity Pools Cost Driver Purchase orders Machine sets ups Product testing Machining #orders #set-ups # tests #machine hours Estimated Overhead $100,000 $320,000 $420,000 $810,000 Estimated Total Activity 2,000 orders 10,000 set ups 7,000 tests 180,000 machine hours Material handling # moves $240,000 600 moves Each of the products require the following: Stone A 500 tons Purchase orders 1,900 Machine set-ups 9,500 Product testing 6,000 Machine hours 100,000 Moves - Material handling Stone B 4,000 tons 100 500 1,000 80,000 110 490 a) Under the traditional product costing using machine hours, calculate the manufacturing cost in total and per ton (unit) for both products (round to the nearest cent). b) Under ABC, a. prepare a schedule showing the calculation of the activity-based overhead rates per cost driver. b. calculate the manufacturing costs in total and per ton (unit) for both products (round to the nearest cent)