Njombe Corporation manufactures a variety of products. In the past, Njombe has been using a traditional costing system in which the predetermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this system was distorting costs and selling prices, Njombe has decided to switch to an activity-based costing system for manufacturing overhead costs that uses the three activity cost pools listed below. Selling prices are still to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows:

Activity Cost Pool	Activity Measure			Estimated Activity	Estimated Overhead Cost
Machine Setups	Number of setups			400	$	150,000
Quality Control	Number of inspections			1,500	$	180,000
Other Overhead	Machine hours			30,000	$	480,000

Information (on a per unit basis) related to three popular products at Njombe are as follows:

	Model #19			Model #36			Model #58
Direct material cost	$	400		$	540		$	310
Direct labor cost	$	810		$	600		$	220
Number of setups		2			3			1
Number of inspections		1			3			1
Number of machine hours		4			8			10

In comparing the traditional system with the activity-based costing system, which of Njombe's Models had higher unit product costs under the traditional system?

Multiple Choice

• #19

• #19 and #58

• #58

• #36 and #58