SecretLab, Inc., produces two types of gaming chairs: Overwatch and Cyberpunk. Their biggest seller is the Overwatch, but they have been concerned about the recent decline intheir market share for the Overwatch. 3,200 SecretLab utilises a simple costing system. The company's simple costing system has two direct cost categories (material and labour) and one indirect cost pool. The simple costingsystem allocates indirect costs on the basis of machine-hours. Information related to SecretLab's production for the most recent year follows: Overwatch Cyberpunk Units sold 1,800 Selling price $ 125 Direct material cost per unit Direct manufacturing labour cost per hour $ Direct manufacturing labour hours per unit 2.25 Production runs Material moves Machine setups Machine-hours 5,500 Number of inspections 150 $ $ $ 200 45 16 $ 30 16 1.50 40 72 45 85 168 155 4,500 250 The owners have heard of other companies in the industry that are now using activity based costing and are curious how ABC would affect their product costing decisions. After analysing the indirect cost pool for SecretLab, the owners identify six activities as generatingindirect costs: production scheduling, material handling, machine setup, assembly, inspection and marketing. SecretLab collected the following data related to the indirect costactivities. Activity Activity cost Activity Cost Driver Production scheduling $95,000 Production runs Material handling $45,000 Material moves Machine setup $25,000 Machine setups Assembly $60,000 Machine hours Inspection $8,000 Number of inspections Marketing costs were determined to be 3% of the sales revenue for each type of chair. A. Required: Calculate the cost of an Overwatch and a Cyberpunk chair under the existing simplecosting system (per unit cost). B. Calculate the cost of an Overwatch and a Cyberpunk chair under an Activity Based Costing system (per unit cost). C. Compare the costs of the chairs in requirements A and B. Why do the two systemsdiffer in the cost of an Overwatch and a Cyberpunk chair? D. How can SecretLab use the new cost information from the ABC system to addressthe declining market share for Overwatch chairs