Maxey & Sons manufactures two types of storage cabinetsType A and Type Band applies manufacturing overhead to all units at the rate of $92 per machine hour. Production information follows. Descriptions Type A Type B Anticipated volume (units) 18,400 34,500 Direct-material cost per unit $ 14 $ 21 Direct-labor cost per unit 19 19 The controller, who is studying the use of activity-based costing, has determined that the firms 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. Descriptions Type A Type B Total Setups 112 72 184 Machine hours 36,800 51,750 88,550 Outgoing shipments 200 150 350 The firms total overhead of $8,146,600 is subdivided as follows: manufacturing setups, $1,777,440; machine processing, $4,887,960; and product shipping, $1,481,200. Required: Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the companys current overhead costing procedures. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. 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? Assume that the current selling price of a Type A storage cabinet is $264.50 and the marketing manager is contemplating a $33 discount to stimulate volume. Is this discount advisable