Problem 3-12A Contrasting ABC and Conventional Product Costs LO3-2, LO3-3, LO3-4 Precision Manufacturing Inc. (PMI) makes two types of industrial component parts -the EX300 and the TX500. It annually produces 50,000 units of EX300 and 11,500 units of TX500. The company's conventional and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below cost system allocates manufacturing overhead to products using a plantwide overhead rate 00 Direct materials Direct labor TX500 $356,325 $152,550 $508,875 $110,000 37,500 $147,500 The company is considering implementing an activity-based costing system that distributes all of is manufacturing overhead to four activities as shown below Activity Activity Cost Pool (and Activity Measure) Manufacturing Overhead EX300 80,000 25 TX500 57,500 200 Total Machining (machine-hours) Setups (setup hours) Product-level (number of products) General factory (direct labor dollars) S 144,375 67,500 75,750 137,500 225 2 $147,500 36,875 $110,000 37,500 Total manufacturing overhead cost $ 324,500 26