Peterzon became convinced that the cost system was partially to blame for some problems the firm was experiencing. However, with over a hundred products, it was diff understand how the cost system was distorting product costs.

To help illustrate the source of these distortions to senior management, Peterzon to develop a simple four$-$product model. He decided it would be helpful if the actual pros costs of the four products were known a priori $($see Table A$).$

Table A Product Costs

$\backslash$table$[[,$A$,B,$C$,0],[\backslash$table$[[$Material cost$],[$Oirect labor$],[$Variable overhead$]],\backslash$table$[[$$$15\mathrm{.}00$