Question 4 (17 marks) Hi-Tech Company (HTC) is a solid state drive (SSD) producer. HTC has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, SSD-Model X (SSDX) has been assigned overhead of $10.80 per unit while SSD-Model Y (SSDY) has been assigned $3.60 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers $360,000 Setup hours Driver Consumption 4,000 Machine setup Materials handling $100,000 Pounds of materials 20,000 Electric power $40,000 Kilowatt-hours 40,000 The following cost information pertains to the production of SSD-Model X and SSD-Model Y, just two of its many products: SSDX SSDY Number of units produced 4,000 20,000 $42,000 $54,000 Direct materials cost Direct labor cost Number of setup hours $24,000 $40,000 400 200 Pounds of materials used 1,000 3,000 Kilowatt-hours 2,000 4,000 Required: a. Use activity-based costing to determine a unit cost for each product. (10 marks) b. Comment on management's belief that the ABC system will generate an overhead allocation that is more accurate than the volume-based system currently in use. (7 marks) Show ALL workings