Read attachment and answer questions

1. Estimate product costs for valves, pumps, and controllers using ABC for overhead activities (primarily Ex. 1 & 4) and direct cost data from the Exhibits. (Answer should be more calculations than sentences.)

2. Compare ABC costs to the standard unit costs (Ex. 2). Explain what causes the different results; be specific - use data from the case and your calculations. Hint: examine both the methods and the product characteristics. (Answer should be more calculations than sentences.)

3. What are the strategic implications of your analysis? What specific actions do you recommend to t managers? Explain the financial implications of your recommendations?