Plum Electronics 5-38 Plum Electronics, a division of Berry Corporation, manufactures two large-screen television models: the Mammoth, which has been produced since 2017 and sells for $990, and the Maximum, a newer model introduced in early 2019 that sells for $1,254. Based on the following income statement for the year ended November 30,2021, senior management at Berry have decided to concentrate Plum's marketing resources on the Maximum model and to begin to phase out the Mammoth model because Maximum generates a much bigger operating income per unit. Details for cost of goods sold for Mammoth and Maximum are as follows: a Mammoth requires 1.5 hours per unit and Maximum requires 3.5 hours per unit. The direct manufacturing labour cost is $13.20 per hour. b Machine costs include lease costs of the machine, repairs, and maintenance. Mammoth requires 8 machine-hours per unit and Maximum requires 4 machine-hours per unit. The machine-hour rate is $19.80 per hour. ' Manufacturing overhead costs are allocated to products based on machine-hours at the rate of $27.50 per hour. Plum's controller, Steve Jacobs, is advocating the use of activity-based costing and activitybased management and has gathered the following information about the company's manufacturing overhead costs for the year ended November 30,2021 . Required Using activity-based costing, calculate the gross margin per unit of the Maximum and Mammoth models and explain briefly why these numbers differ from the gross margin per unit of the Maximum and Mammoth models calculated using Plum's existing simple costing system. Comment on Clark's concerns about the accuracy and limitations of ABC. How might Plum find the ABC information helpful in managing its business? What should Steve Jacobs do in response to Clark's comments