Montana Company manufactures three products in its plant: X, Y, and Z.
Unit costs and machine hour usage for the three products are:
			X	Y	Z
	Direct materials		$38	$32	$44
	Direct labor		$17	$11	$15
	Machine hours		3	2	4
	Budgeted production (units)		25,000	33,000	14,000
a)	Assume that Montana uses a traditional method of overhead allocation, based on direct labor cost.
	Budgeted overhead for the period is $4,091,800.
	Compute the unit cost of production to the nearest cent for products X,Y, and Z.
b)	Now assume that Montana uses an ABC system with three cost drivers: machine hours, setups, and number of parts.
	Product X requires two setups per period, and requires five distinct parts. Product Y requires four setups, and eight parts. Product Z requires ten setups and fifteen parts.
	Cost pools:
	Setups	528,300
	Machine hours	2,797,400
	Parts	766,100
		4,091,800
	Compute the unit cost of production for products X, Y, and Z using the ABC system.
c)	Identify several possible advantages or disadvantages to Montana of using the ABC method. (Limit 200 words).