Mix-a-Lot Corporation manufactures two hand mixers, Regular and Deluxe. Deluxe mixers were added as a product line three years ago. Deluxe mixers are the more complex of the two products as they have more features. Deluxe mizers requiring one hour of direct labour time per unit to manufacture, compared to one-half hours of direct labour time for Regular ladder. Indirect costs are currently allocated to the products on the basis of direct labour hours. The company estimated it would incur $665,000 in manufacturing overhead costs and produce 5,000 units of Deluxe ladders and 17,500 units of Regular ladders during the current year. Unit costs for materials and direct labour are: Regular Deluxe Direct labour $18.00 $36.00 Direct materials $24.00 $32.00 Indirect costs are: Estimated Estimated Estimated Indirect Activity Activity Costs Regular Deluxe Total Activity cost pools/drivers: Machine setups $306,000 560 1250 1,810 Purchase orders $55,000 240 250 490 Machine hours $256,000 4000 13750 17,750 Maintenance requests $48,000 160 375 535 Total Indirect Costs $665,000 Required: 1. Determine the unit cost of the Deluxe mixer using traditional costing with direct labor hours as the allocation base. 2. Determine the unit cost of the Deluxe mixer using activity-based costing. 3. Does using traditional costing over or under cost the Deluxe mixer? 4. Identify two indicators traditional costing may not be appropriate for Mix-A- Lot