Required:

$1.$ Answer the following regarding the product costing system of the Cable Service Division:

a$.$ Complete the following table with the appropriate product costs for the Cable Service Division: Round the

answers to two decimal places.

Basic Enhanced Premium

Product cost for pricing $ $ $

Product cost for cost of services sold

The product cost for the $$ includes all production, marketing, and customer service costs. There

may be$,$ and very likely is$,$ very little R&D function in the Cable Service Division. Thus, this $$ unit

cost could be used for other managerial objectives, such as product mix decisions and strategic and tactical

profitability analysis. The $$ cost includes only production costs; complying with external financial

reporting guidelines is the primary managerial objective of this method.

b$.$ Allocation relies on:

$$

c$.$ Direct tracing relies on:

$$

d$.$ Driver tracing relies on:

$$

e$.$ Based on how costs are assigned, do you think that the Cable Service Division is using a functional$-$based or an

activity$-$based costing system?