Required Information [The following information applies to the questions displayed below.] Lauder Company manufactures and distributes various fixtures used primarily in new building construction. At the company's Bayside plant, Lauder produces two models of one widely used fixture designated by model names LC-20 and LC-50. Currently, the Bayside plant uses direct labor-hours to allocate manufacturing overhead costs to products. The vice president-manufacturing (VP-M) at Lauder has recently been considering updates to the company's costing systems as a way to ensure that managers had the best information available for decision making. However, rather than update throughout the entire firm. the VP-M and CFO agreed to test an ABC system. Because of its size and focus, the Bayside plant was selected for the experiment. An ABC study team. consisting of both plant and corporate employees was formed to propose an ABC system and compare the product costs with those reported by the current system. Based on the experiment, the executives at Lauder will decide whether to roll out the new cost system to the entire company. The study team identified four cost pools into which the manufacturing overhead costs could be grouped. There was a great deal of discussion about both the pools and the cost drivers. The final system selected consisted of the following pools and drivers. The costs were based on the forecasts for the coming year. Cost Pools Costs Activity Drivers Material inspection $ 396,090 Direct material cost Assembly 2, 210, 080 Machine-hours Equipment setup 790,090 Production runs Packaging and shipping 420,980 Units shipped Data for production of the two products at the Bayside plant for the coming year of operations follows: Products LC-20 LC-50 Total direct material costs $ 540, 290 $ 180, 208 Total direct labor costs $ 420, 208 $ 210, 208 Total machine-hours 92, 125 46,298 Total number of production runs 75 50 Number of units produced and shipped 240, 090 60, 808 All direct labor at the Bayside plant is paid $35 per hour. The study team decides to look more closely at the assembly activity and determines that it can be broken down into two activities: production and engineering. Production covers the costs of ongoing manufacturing while engineering includes those activities dealing with design changes, equipment calibration, and so on. The costs attributed to production are $1,657,500, and the costs attributed to engineering are $552,500. After discussion with plant engineers, the team decides that although machine-hours are an appropriate cost driver for production, the best cost driver for engineering is setups because most of the work arises from changes in the way the product is run. Required: -1. Compute the totals of the cost driver rates shown below. a-2. What unit product costs will be reported for the two products if the revised ABC system is used? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Compute the totals of the cost driver rates shown below. Note: Round "Packaging and shipping" answer to 2 decimal places. Material inspection 55 % of material dollars Production per hour Engineering per setup Equipment setup 8,320 per setup Packaging and shipping 1.40 per unit Req Al Reg A2 What unit product costs will be reported for the two products if the revised ABC system is used? LC-20 LC-50 Direct material costs 540,000 180,000 Direct labor cost 420.000 210,000 Overhead: Material inspection 297.000 90,000 Production Engineering Equipment setup 474,000 316,000 Packaging and shipping 336.000 84,000 Total costs 2,067,000 889,000 Number of units 240.000 60,000 Unit cost 8.61 14.82