Manchester Technology, |nc., manufactures. several different types of printed circuit boards; however, two of the boards account for the majority of the company's sales. The first of these boards, a television circuit board, has been a standard in the industry for several years. The market for this type of board is competitive and pricesensitive. Manchester plans to sell ?0,000 of the TV boards in 20x1 at a price of $450 per unit. The second high-volume product, a personal computer circuit board, is a recent addition to Manchester's product line. Because the PC board incorporates the latest technology, it can be sold ata premium price. The 20x1 plans include the sale of 45,000 PC boards at $705 per unit. Manchester's management group is meeting to discuss how to spend the sales and promotion dollars for 20x1. The sales manager believes that the market share for the TV board could be expanded by concentrating Manchester's promotional efforts in this area. In response to this suggestion, the production manager said, \"Why don't you go after a bigger market for the PC board? The cost sheets that | get show that the contribution from a PC board is signicantly larger than the contribution from a TV board. I know we get a premium price for the PC board. Selling it should help overall profitability." The costaccounting system shows that the following costs apply to the PC and TV boards. PC Board TV Board Direct material $224 $144 Direct labor 3.0 hr. 1.5 hr. Machine time 1.6 hr. 1.5 hr. Variable manufacturing overhead is applied on the basis of direct-labor hours. For 20x1, variable overhead is budgeted at $2,315,000, and direct-labor hours are estimated at 264,000. The hourly rates for machine time and direct labor are $30 and $38, respectively. The company applies a material-handling charge at 10 percent of material cost. This materialhandling charge is not included in variable manufacturing overhead. Total 20x1 expenditures for direct material are budgeted at $20,160,000. illndrewI Fulton, Manchester's controller, believes that before the management group proceeds with the discussion about allocating sales and promotional dollars to individual products, it might be worthwhile to look at these products on the basis ofthe activities involved in their production. Fulton has prepared the following schedule to help the management group understand this concept. \"Using this information,\" Fulton explained, \"we can calculate an activitybased cost for each T'v' board and each PC board and then compare it to the standard cost we have been using. The only cost that remains the same for both cost methods is the cost of direct material. The cost drivers will replace the direct labor, machine time, and overhead costs in the old standard cost gures." Eudgeted Cost Procurement Production scheduling Packaging and shipping Total Machine setup Hazardous waste disposal Quality control General supplies Total Machine insertion Manual insertion Nave-soldering Total $ 353, 333 455, 333 533, 333 $ 2,245,333 $ 512,333 133, 333 1, 153, 333 14?, 333 $ 2,315,333 $ 2,553,333 5, 255 , 333 289,888 $11, 435, 333 Eudgeted Annual Activity Cost Driver for Cost Driver Number of parts 5,255,688 parts Number of boards 125,568 boards Number of boards 125,568 boards Number of setups 425,668 setups Pounds of waste 23,558 pounds Number of inspections 425,668 inspections Number of boards 125,568 boards Number of parts 3,861,688 parts Number of parts 1,394,688 parts Number of boards 125,568 boards Required per Unit PC Board TV Board Parts: 55 31 Machine insertions 4-1 33 Manual insertions 24 1 Machine setups 4 3 Hazardous waste disposal, in 1b. 6.40 6.85 Inspections 4 3 Required: 1. Identify at least four general advantages associated with activitybased costing. 2. On the basis of Manchester's unit cost data given ln the problem, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and prot in 20x1. 3. Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and prot in 20x1