Please help me figure out the answers, also show the details. Thank you!
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Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two modelsone (A25) principally used for fine eyewear and the other (A10) 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, forthese manufacturing cost pools. Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 3.30 per part Manufacturing Hours of machine $24-20 per hour superVision time Assembly Number of parts $ 4.65 per part Machine setup Each setup $47.40 per setup Inspection and testing Logged hours $56.00 per hour Packaging Logged hours $29.00 per hour BSI currently sells the A1 0 model for $2,470 and the A25 model for $1,525. Manufacturing costs and activity usage for the two products follow: A710 A725 Direct . $134.76 $73.44 materials Number of 128 99 parts Machine-hours 8.10 5.40 I$SpeCtlon 1.70 0.95 time Packing time 1.05 0.54 Setups 16 8 Required: 1. Calculate the product cost and product margin for each product. 2. A new competitor has entered the market for lenspolishing equipment with a superior product at significantly lower prices, $1 ,795 for the A10 model and $1 ,370 for the A25 model. To try to compete, BSI has made some radical improvements in the design and manufacturing of its two products. The materials costs and activity usage rates have been decreased significantly, as follows: A-lO A-25 Direct materials $ 92.65 $ 49.45 Number of parts 124 95 Machine-hours 8.5 3.4 Inspection time 1.7 0.85 Packing time 0.91 0.34 Setups 8 8 2a. Calculate the total product costs with the new activity usage data. 2b. Can BSI make a positive gross margin with the new costs, assuming that it must meet the price set by the new competitor\"? 4. What cost management method might be useful to BSI at this time? Calculate the product cost and product margin for each product. (Round your answers to 2 decimal places.) Product cost Product margin Calculate the total product costs with the new activity usage data. (Round your answers to 2 decimal places.) Can BSI make a positive gross margin with the new costs, assuming that it must meet the price set by the new competitor? Yes or No ? What cost management method might be useful to BSI at this time? (Only one answer is correct) 0 Target costing o Activity-based costing o Life-cycle costing o Kaizen costing