Lightsaber, Inc. manufactures two models of high$-$pressure steam valves, the BB$7$ model and the BB$8$ model. Budgeted manufacturing overhead cost and operating data regarding production and sales of $2,000$ units of the BB$7$ model and $8,000$ units of the BB$8$ model for $2023$ follow:

Budgeted Level for Cost Driver

Activity Cost Pool Budgeted Overhead Costs Cost Driver BB$7$ BB$8$ Total

Machine setups $$800,000$ Number of setups $150100250$

Vendor negotiation $200,000$ Number of parts $8002001,000$

Assembly $400,000$ Direct labour hours $4,00036,00040,000$

$$1,400,000$

Required:

$1.$ Identify and briefly explain each of the three cost drivers as either unit$-$level or batch$-$level or product$-$level or organization$-$sustaining level.

$2.$ Calculate the budgeted manufacturing overhead cost for each unit of the two models, using only one unit$-$level cost driver.

$3.$ Calculate the budgeted manufacturing overhead cost for each unit of the two models, using the activity$-$based$-$costing $($ABC$)$ method.

$4.$ Assume Lightsaber, Inc. will use only the unit$-$level driver. Compared to the ABC method, by how much $($in terms of total allocated$/$applied manufacturing overhead cost$),$ if any, will the total output of each model be either under$-$costed or over$-$costed$?$

$5.$ Is the result obtained in part $(4)$ above consistent with your expectations? Explain.