Plum's simple costing system allocates all manufacturing overhead other than machine costs on the hasis of machine-hours, an output unit-level cost driver. Consequ ently, the more machine-hours per unit that a product needs, the greater the manufactur ing overhead allocated to it. Because Mamoth uses twice the number of machine-hours per unit compared to Maximum, a large amount of manufacturing overhead is allocat ed to Mammoth. The ABC analysis recognizes several batch-level cost drivers such as purchase orders, shipments, and setups. Maximum uses these resources much more intensively than Mamme th. The ABC system recog nizes Maximum's use of these overhead resources. Consider, for ex ample, purchase order costs. The simple system allocates these costs on the basis of machine- hours. As a resalt, each unit of Mammoth is alocated twice the purchase order costs of cach unit of Maximum. The ABC system allocates $440,550 of purchase order costs to Manamoth (equal to $20.02 (S440,550 + 22,000] per unit) and S604,890 of purchase order costs to Man inum (equal to SI51.23 (S604,890 + 4,000) per unit). Each unit of Maximum uses 8.31 (S 151.23 + $20.02) times the purchases order costs of cach unit of Manmoth. Recognizing Maximum's more intensive use of manufacturing overhe ad results in Maximum showing a much lower profitability under the ABC system By the same token, the ABC analysis shows that Mammoth is quite profitable. The simple costing system overcosted Manmoth and so made it appear less profitable.

can you explain this paragraph for me in detail please