Maxey & Sons manufactures two types of storage cabinets-Type A and Type B-and applies manufacturing overhead to all units at the rate of $132 per machine hour. Production information follows. Type A Anticipated volume (units) Direct-material cost per unit Direct-labor cost per unit 26,400 Type B. 49,500 $ 34 39 $ 51 39 The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow. Setups Machine hours. Outgoing shipments Type A 152 Type B Total 112 264 52,800 2001 74,250 150 127,050 350 The firm's total overhead of $16,770,600 is subdivided as follows: manufacturing setups, $3,659,040; machine processing. $10,062,360; and product shipping, $3,049,200. Required 1 Required 2 Required 3 Required 4 Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. (Round activity based application rates, overhead application and the final answers to 2 decimal places.) Unit manufacturing costs Type B < Required 1 Required 3 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Is the cost of the Type A storage cabinet overstated or understated (i.e., distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much? (Do not round intermediate calculations. Round activity based application rates, overhead application and the final answers to 2 decimal places.) Type A store cabinet line is