The Acme Corp. manufactures three types of engineered components for automobile engines. Acme sells these components to auto manufacturers and distributors of replacement parts. The three components are: Quality, Superior and Superb. During 2004 Acme applied all costs except direct materials based on a single application rate using direct labor hours as the denominator. As a result of recent TQM training, the managers of Acme are considering adopting an ABC costing model for 2005. A study of the firms operations resulted in the identification of six cost drivers. The 2005 budgeted costs for each driver are as follows: Prepare a cost application rate for each activity. Prepare a schedule that shows budgeted unit costs of each component. Using the old direct labor hour based system, compute the budgeted unit costs for each component. Compare your answers in requirements 2 and 3. Give your interpretations of these data for management. What decisions might be affected by the data contained in the new system