Pro Manufacturing produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2009, pro Manufacturing compiled the following data for the two products:

Deluxe Standard Sales units $50,000 $400,000

Sales price per unit $650.00 $475.00

Direct material and labor costs per unit $180.00 $130.00

Manufacturing support costs per unit $ 80.00 $120.00

Last year, Pro Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 20X6:

Activity Cost Driver Cost Total Deluxe Standard

Setups # of setups $ 500,000 500 400 100

Machinerelated # of machine hours $44,000,000 600,000 300,000 300,000

Packing # of shipments $ 5,000,000 250,000 50,000 200,000

a. Using the activity-based costing data presented above:

1. Compute the cost-driver rate for each overhead activity.

2. Compute the manufacturing overhead cost per unit for each type of entry door.

3. Compute the total cost to manufacture one unit of each type of entry door.

b. Why would the CFO consider an ABC analysis to be valuable?