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2 Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models-one (A-25) principally used for fine eyewear and the other (A-10) for lenses used in binoculars, cameras, and similar equipment. The following table shows the manufacturing cost of each unit is calculated, using activity-based costing, for these manufacturing cost pools. Allocation Base Costing Rate Cost Pools Manufacturing supervision $23 79 ne bour $3.15 per part Hours of machine time Number of parts Assembly ration and testing LoEFed hour Logged hours S41 09 Packaging $19.00 per hour BSI currently sells the A-10 model for $1,370 and the A-25 model for $945. Manufacturing costs and activity usage for the two products follow 5 Direct materials 13 $68.44 Number of parts Machine-hours 123 94 6.68 4.40 me Packing time 0.88 a.44 Setups 6 3 Required: Calculate the product cost and product margin for each product A new competitor has entered the market for lens-polishing equipment with a superior product at significantly lower prices, $1,100 for the A-10 model and $815 for the A-25 model. To try to compete, BSI has made some radical improvements in the design and manufacturing o two products materials costs and activity usage rates have bee decreased significantly, as follows: A-25 A-10 $82. $44.45 Direct materials Machine-hours 6.6 2.4 Inspection tine 1.2 0.60 Packing time Setups 0.76 .24 2-a. Calculate the total product costs with the new activity usage data nBSI make a positive gross margin with the ss, dssuming that it must meet the price set by the new competitor? d migh cost nagement met Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 4 Calculate the product cost and product margin for each product. (Round your answers to 2 decimal places.) A-10 A-25 Product cost Product margin Req 2A Req 1 Req 1 Req 2A Req 2B Req 4 Can BSI make a positive gross margin with the new costs, assuming that it must meet the price set by the new competitor? Yes No Req 2A Req 4> Req 1 Req 2A Req 2B Req 4 What cost management method might be useful to BSI at this time? Target costing OActivity-based costing Life-cycle costing Kaizen costing Req 2B Reg 4> OOO0