Problem 1: Castor Company (Activity Based Costing) Castor Company (CC) manufactures two products, Deluxe and Regular. Below is production and cost information for 2020. Direct material and labor costs Deluxe Regular Unit cost of direct materials Hourly direct labor wage rate* Direct labor-hours per unit $100 $ 25 3 $ 50 $ 20 3 *Deluxe units take more skilled, and better paid, workers to assemble than Regular units. Overhead costs Driver Consumption Activity Overhead Cost Driver Deluxe Regular Material movement $ 7,000 Number of production runs 150 200 Machine setups 400,000 Number of production runs 150 200 Inspections 588,000 Number of units produced 4,600 15,000 Shipment 5,000 Number of shipments 50 200 $1,000,000 (As an example of how to read this last table, the total overhead costs associated with moving materials at CC is $7,000. The driver for material movement costs is the number of production runs. There are in total 350 production runs, 200 for the Regular product and 150 for the Deluxe product. Other rows of the table are to be interpreted similarly.) Determine the following: a) Total Cost per unit (direct plus overhead) of the deluxe product if CC allocates the entire overhead of $1,000,000 using direct labor costs as the cost driver. (2 points) b) Total Cost per unit (direct plus overhead) of the deluxe product if CC allocates overhead costs using activity-based costing (ABC). (4 points) (Please do not round intermediate answers.) Direct material and labor costs Deluxe Regular Overhead Costs Activity Material movement Machine setups Inspections Shipment Driver Consumption Deluxe Regular 150 200 150 200 4,600 15,000 $100 Unit cost of direct materials Hourly direct labor wage rate Direct labor-hours per unit Overhead Cost Driver $7,000 Number of production runs 400,000 Number of production runs 588,000 Number of units produced 5,000 Number of shipments $1,000,000 SSO $20 S25 3 3 50 200 Deluxe Total cost per unit using direct labor costs Total cost per unit using ABC