Required information 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 summer project for the intern would be to develop, in one self-contained area of the plant, on 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 Costs Activity Drivers Receiving $ 600,000 Direct material cost Manufacturing 5,590,000 Machine-hours Machine setup 900,000 Production runs Shipping 1,000,000 Units shipped In this porticular area, Cain produces two of its many products Standard and Deluxe. The following che data for production ove for the latest full year of operations Total direct suterial costs Total direct labor costs Total machine hours Total number of setups Total pounds of material Total direct labor-hours Number of units produced and shipped Products Standard Deluxe $230,000 $170,000 $650,000 $200,000 144,000 106,000 98 110 16,500 10,500 6,150 3,900 17.000 8,000 Required: 6. The current cont occounting system charges overhead to products based on machine hoursWhat unit product costs will be reported for the two products of the current cost system continues to be used? b. The intern suggests on ABC system using the cost drivers identified above What unit product costs will be reported for the two products if the ABC system is used? Complete this question by entering your answers in the tabs below. Required A Required B The current cost accounting system charges overhead to products based on machine hours. What unit product costs will be reported for the two products if the current cost system continues to be used? (Do not round Intermediate calculations and round "Unit cost antwers to 2 decimal places.) Standard Deluxe Direct couts Overhead Total costs 5 Number of units Unit cost 0 Required 8 > Complete this question by entering your answers in the tabs below. Required A Required B The intem suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products If the ABC system is used? (Do not round intermediate calculations and round "Unit cost" answers to 2 decimal places.) Standard Deluxe Direct Coats Overhead Receiving Manufacturing Machine setup Shipping Total costs $ Number of units Unit cost 0 0 0 0
