Techno Company ABC The management of Techno Company would like to use activity-based costing to allocate overhead rather than one plant-wide rate. They are preparing a comparison between their traditional allocation and an ABC version. Analysis of the business has already been done and has produced the following list of key activities, their related cost drivers, and estimates for both the costs and related cost-driver activity. [review AFM section 3.3 for the basic concepts here] Estimated Cost Driver Activity Activity Total Estimated Costs m #of Purchase orders mm 1,000 $1,200,000 Production setup # of Setups $1,125,000 Quality Inspection hours 3,600 8,400 12,000 $750,000 Inspections w Units shipped 36,000 12,000 48,000 $600,000 1. Adapt your existing financial model of Techno's business to use ABC rather than a single quantitative measure. Calculate the prots for HD's and 4K's under ABC. a. Determine the cost driver allocation rule for each activity. b. Allocate the activity costs to the two types of monitors using the estimated cost driver activity and your allocation rules. 2. Compare your ABC version to your original Techno allocation with Direct Labor Hours. What activities have the biggest impact on allocated costs between the two types of monitors? Based on your analysis, what overhead areas should management be most concerned with in the production of 4K's (the wave of the future!)