summarize the findings found in the previous calculations, and why you think the activity-based costing method gives you more useful information to make decisions for the company. Include in the memo at least 4 reasons why you think activity-based costing is more useful.

Required 1 Gaud Fino Trazo Meier Exactum Overhead costs A Number of units B Prime cost Overhead cost per unit D = A/B Prime cost per unit E = C/B Manufacturing cost per unit F= D + E $43,554 52,300 units $23,900 $0.83 per unit $0.46 per unit $1.29 per unit $61,146 46,800 units $47,100 $1.31 per unit $1.01 per unit $2.32 per unit Working Notes: (1) Total overhead costs = $46,900 + $19,100 + $38,700 = $104,700 (2) Total machine hours = 926 hours + 1,300 hours = 2,226 hours (3) Overhead cost: Gaud Fino Trazo = $104,700 x 926 hours / 2,226 hours = $43,554 (approx) Required 2 Activity Cost pool Cost driver Activity driver (1) (2) (3) = (1)/(2) Preparing cost $46,900 1,240 lots $37.82 per lot Electricity $19,100 2,226 machine hours $8.58 per machine hour Engineering support $38,700 91 modifications $425.27 per modification Workin Notes: (1) Total Lots = 700 lots + 540 lots = 1,240 lots (2) Total machine hours = 926 hours + 1,300 hours = 2,226 machine hours (3) Engineering modifications = 24 modifications +67 modifications 1 = 91 modifications Preparing cost A Electricity B Gaud Fino Trazo Meier Exactum 700 Lots x $37.82 per Lot 540 Lots x $37.82 per Lot = $26,474 = $20,426 926 hours x $8.58 per hour 1,300 hours x $8.58 per hour = $7,945 = $11,154 24 modifications x $425.27 67 modifications x $425.27 = $10,206 = $28,493 $44,625 $60,073 52,300 units 46,800 units $0.85 per unit $1.28 per unit Engineering support C D=A+B+C Total overhead costs Number of units Overhead cost per unit E F=DIE Overhead cost per unit A Prime cost per unit B Manufacturing cost per unit C = A+B Gaud Fino Trazo $0.85 per unit $0.46 per unit $1.31 per unit Meier Exactum $1.28 per unit $1.01 per unit $2.29 per unit