Required Information [The following information applies to the questions displayed below.) MOD Pharmaceutical Company produces three drugs-Diomycin, Homycin, and Addolin-belonging to the analgesic (pain-killer) family of medication. Since its inception four years ago, mob has used a direct labor hour-based system to assign manufacturing overhead costs to products. Eme Weissman, the president of MOD Pharmaceutical, has just read about activity-based costing in a trade Journal. With some curiosity and Interest, she asked her financial controller, Takedo Simon, to examine differences in product costs between the firm's current costing and activity-based costing systems. MOD has the following budget Information for the year. Cost of direct materials Cost of rect labor Number of direct labor hours Number of capsules Diomycin $ 213, eee 258, 7,280 1,080,00 Homycin $ 273,80 242, eee 6,880 588,888 Addolin $ 266,080 271,eee 2,080 388,eee MOD has identified the following activities and cost drivers and has assigned them a total overhead cost of $204,000. Activity Machine setup Plant management Supervision of direct labor Quality inspection Order expediting Total overhead Cost Driver Setup hours Number of Workers Direct labor hours Inspection hours Customers served Budgeted Overhead Cost $ 16,800 36,880 46,888 51,200 52,480 $ 284, eee Budgeted Cost Driver Volume 1,680 1,280 16,800 1,090 685 Takedo selected the cost drivers with the following Justifications: SETUP HOURS: The cost driver of setup hours is used because the same product takes about the same amount of setup time regardless of size of batch. For different products, however, the setup time varles. NUMBER OF WORKERS: Plant management Includes plant maintenance and corresponding managerial duties that make production possible. This activity depends on the number of workers. The more workers Involved, the higher the cost. DIRECT LABOR HOURS: Supervisors spend their time supervising production. The amount of time they spend on each product is proportional to the direct labor hours worked. INSPECTION HOURS: Inspection Involves testing a number of units in a batch. The time varies for different products but is the same for all similar products. NUMBER OF CUSTOMERS SERVED: The need to expedite production increases as the number of customers served by the company Increases. Thus, the number of customers served by MOD is a good measure of expediting production orders. Takedo gathered the following information about the cost driver volume for each product: Setup hours Number of workers Direct labor hours Inspection hours Customers served Diomycin 240 240 7,280 190 53 Homycin 640 440 6,880 240 188 Addolin 840 640 2,080 740 54e Required: 1. Use the firm's current costing system to calculate the unit cost of each product. 2. Use the activity-based cost system to calculate the unit cost of each product