Plantwide versus Departmental Rates, Product-Costing Accuracy: Activity-Based Costing Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensive than that of Model B. Model B is also the more popular of the two speakers. The following data has been gathered for the two products: 1. Compute the overhead cost per unit for each product by using a plantwide rate based on direct labor hours. (Round to two decimal places.) Plantwide rate: $ Model A: overhead cost per unit Model B: $ overhead cost per unit 2. Compute the overhead cost per unit for each product by using ABC. (Round rates and unit overhead costs to two decimal places.) Model A: overhead cost per unit Model B: overhead cost per unit Note: Be sure to complete both tables below. Overhead assignment 3. Suppose that Ramsey decides to use departmental overhead rates. There are two departments: Department 1 : (machine intensive) with a rate of $3 pe machine hour and Department 2: (labor intensive) with a rate of $1 per direct labor hour. The consumption of these two drivers is as follows: Compute the overhead cost per unit for each product by using departmental rates. (Round to two decimal places.) Model A : per unit Model B: per unit 4. CONCEPTUAL CONNECTION Using the activity-based product costs as the standard, comment on the ability of departmental rates to improve the accura of product costing. Did the departmental rates do better than the plantwide rate? A common justification is to use hours for machine-intensive departments and hours for labor-intensive departments. Using activity-based costs as the standard, we can say that departmental rates the accuracy of the overhead cost assignment for both products. The departmental rates cost A well the ABC method while the plantwide rate costs A well the ABC method. However, the rates of difference are very close. Looking at it this way, department costs are not clearly more wrong than the plantwide rate; they are wrong in a direction. The departmental rates do better than the plantwide rates