Self-Study Problem 5-1 Volume-Based Costing versus ABC Carter Company manufactures two products, Deluxe and Regular, and uses a traditional two-stage cost allocation system. The first stage assigns all factory overhead costs to two production departments, A and B, based on machine hours. The second stage uses direct labor hours to allocate overhead to individual products. For the current year, the firm budgeted $1,500,000 total factory overhead cost. The $1,500,000 was for the planned levels of machine and direct labor hours shown in the following table. Production Department A Production Department B Machine hours 6,000 24,000 Direct labor hours 30,000 15,000 The following information relates to the firms operations for the month of January: Deluxe Regular Units produced and sold 300 1,200 Unit cost of direct materials $ 150 $ 75.00 Hourly direct labor wage rate $ 25 $ 30 Direct labor hours in Department A per unit 2 2 Direct labor hours in Department B per unit 1 1 Carter Company is considering implementing an activity-based costing system. Its management accountant has collected the following information for activity cost analysis for the current year: Budgeted Budgeted Driver Consumption Activity Overhead Cost Driver Quantity Deluxe Regular Material movement $ 10,500 Number of production runs 403.00 23.00 30 Machine setups 600,000 Number of setups 750 38.00 75.00 Inspections 882,000 Number of units 29,400 300 1,200 Shipment 7,500 Number of shipments 375.00 75.00 150 $ 1,500,000 Required: 1. Calculate the unit cost for each of the two products under the existing volume-based costing system. (Round "Regular unit cost" to 2 decimal places.) 2. Calculate the overhead per unit of the cost driver under the proposed ABC system. 3. Calculate the unit cost for each of the two products if the proposed ABC system is adopted. (Round your intermediate calculations to 1 decimal place and final answers to 2 decimal places.)