Problem 9-57 Activity-Based Costing and Predetermined Overhead Rates (LO 9-3, 5, 6) Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer intern has suggested that the cost system might be providing misleading information. The controller decided that a good surrimer project for the intern would be to develop, in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intern identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: $ Cost Pools Receiving Manufacturing Machine setup Shipping Costs 323,400 2,124,000 228,000 720,000 Activity Drivers Direct material cost Machine-hours Production runs Units shipped $ In this particular area, Cain produces two of its many products: Standard and Deluxe. The following are data for production for the latest full year of operations: Total direct material costs Total direct labor costs Total machine-hours Total number of setups Total pounds of materia Total direct labor-hours Number of units produced and shipped Products Standard Deluxe S144,000 $150.000 S486,000 $270,000 90,000 90,000 60 9,000 7,200 3,600 3,000 18,000 6.000 The intern decides to look more closely at the manufacturing activity and determines that it can be broken down into two activities: production and engineering. Production covers the costs of ongoing manufacturing while engineering includes those activities dealing with engineering changes, design modifications, and so on. The costs attributed to production are $1,440,000 and the costs attributed to engineering are $684,000. After discussion with plant engineers, the intern decides that the best cost driver for engineering is setups, because most of the work arises from changes in the way the product is run. Required: 1. Compute the totals of the cost driver rates shown below. (Round intermediate calculations and Manufacturing" answer to 2 decimal places.) Receiving Manufacturing Engineering Machine setup Shipping % of material dollars per machine-hour per setup per setup per unit 2. What unit product costs will be reported for the two products if the revised ABC system is used? Standard Deluxe Direct Costs Overhead: Receiving Manufacturing Engineering Machine setup Shipping Total costs $ 0 $ 0 Number of units Unit cost