Problem 5-50 Activity-Based Costing: Cost Analysis (LO 5-1, 5-2,5-3,5-4, 5-5) Meditech, Inc, manufactures two types of medical devices, Medform and Procel, and applies over- head on the basis of direct-labor hours. Anticipated overhead and direct-labor time for the upcoming accounting period are $710,000 and 20,000 hours, respectively. Information about the company's prod- ucts follows. 1. Predetermined overhead rate: $35.50 per direct-labor hour 2. Application rate, product inspection: $6 per IH Medform: Estimated production volume, 2,500 units Direct-material cost, $30 per unit Direct labor per unit, 3 hours at $15 per hour Procel: Estimated production volume, 3,125 units Direct-material cost, $45 per unit Direct labor per unit, 4 hours at $15 per hour Meditech's overhead of $710,000 can be identified with three major activities: order processing ($120,000), machine processing ($500,000), and product inspection ($90,000). These activities are driven by number of orders processed, machine hours worked, and inspection hours, respectively. Data relevant to these activities follow. Orders Machine Hours Inspection Processed Worked Hours Medform.................. 350 23,000 4,000 250 27,000 11,000 Total............... 50,000 15,000 Procel. Management is very concerned about declining profitability despite a healthy increase in sales volume. The decrease in income is especially puzzling because the company recently undertook a massive plant renovation during which new, highly automated machinery was installed-machinery that was expected to produce significant operating efficiencies. Required: 1. Assuming use of direct-labor hours to apply overhead to production, compute the unit manufactur- ing costs of the Medform and Procel products if the expected manufacturing volume is attained. 2. Assuming use of activity-based costing, compute the unit manufacturing costs of the Medform and Procel products if the expected manufacturing volume is attained