Spencer's Sports manufactures outdoor equipment at three regional plants. The Freeway Plant produces two models of fishing reels, the Stream and the Surf. The Surf model is heavier and more durable. Overhead costs are currently allocated using direct labor cost. The plant manager has just returned from a week-long executive course where the instructor discussed product costing and, specifically, activity-based costing (ABC). The plant manager has asked the plant controller about implementing ABC at the plant. The controller has collected the following information on plant overhead for the most recent period: Activity Setting up Inspecting Packing and shipping Total overhead Cost Driver Number of setups Number of packages shipped Cost $ 168,480 126,360 79,560 $ 374,400 Cost Driver Volume Stream Surf 15 36 135 45 50 200 Number of inspections The controller also collected the following information on production volume and direct costs for each product: Units produced Stream 18,000 Surf 4,500 Total 22,500 Direct materials cost Direct labor cost Total direct cost $ 450,000 189,000 $ 639,000 $ 337,500 279,000 $ 616,500 $ 787,500 468,000 $ 1,255,500 Required: a. Compute the unit cost of each model under the current system. b. Compute the unit cost of each model under the ABC system suggested by the controller's classification of overhead costs.