[The following information applies to the questions displayed below.) ADA Pharmaceutical Company produces three drugs-Diomycin, Homycin, and Addolin-belonging to the analgesic (pain- killer) family of medication. Since its inception four years ago, ADA has used a direct labor hour-based system to assign manufacturing overhead costs to products. Eme Weissman, the president of ADA Pharmaceutical, has just read about activity-based costing in a trade journal. With some curiosity and interest, she asked her financial controller, Takedo Simon, to examine differences in product costs between the firm's current costing and activity-based costing systems. ADA has the following budget information for the year: Cost of direct materials Cost of direct labor Number of direct labor hours Number of capsules Diomycin $ 200,000 251,000 7, 210 1,010,000 Homycin $ 266, 000 235,000 6,810 501,000 Addolin $ 259,000 264, 000 2,010 301,000 ADA has identified the following activities and cost drivers and has assigned them a total overhead cost of $200,500. Activity Machine setup Plant management Supervision of direct labor Quality inspection Order expediting Total overhead Cost Driver Setup hours Number of Workers Direct labor hours Inspection hours Customers served Budgeted Budgeted Cost Overhead Cost Driver Volume $ 16, 100 1,610 36,100 1, 210 46, 100 16,100 50, 500 1,055 51, 700 650 $200, 500 Takedo selected the cost drivers with the following justifications: SETUP HOURS: The cost driver of setup hours is used because the same product takes about the same amount of setup time regardless of size of batch. For different products, however, the setup time varies. NUMBER OF WORKERS: Plant management includes plant maintenance and corresponding managerial duties that make production possible. This activity depends on the number of workers. The more workers involved, the higher the cost. DIRECT LABOR HOURS: Supervisors spend their time supervising production. The amount of time they spend on each product is proportional to the direct labor hours worked. INSPECTION HOURS: Inspection involves testing a number of units in a batch. The time varies for different products but is the same for all similar products. NUMBER OF CUSTOMERS SERVED: The need to expedite production increases as the number of customers served by the company increases. Thus, the number of customers served by ADA is a good measure of expediting production orders. Takedo gathered the following information about the cost driver volume for each product: Setup hours Number of workers Direct labor hours Inspection hours Customers served Diomycin Homycin 205 605 205 405 7, 210 6, 810 155 205 46 101 Addolin 805 605 2,010 705 505 Required: 1. Use the firm's current direct labor hour-based costing system to calculate the unit cost of each product. 2. Use the activity-based costing system to calculate the unit cost of each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use the firm's current direct labor hour-based costing system to calculate the unit cost of each product. (Round your intermediate calculations and final answers to two decimal places.) $ Diomycin 206,000.00 251,000.00 Direct Materials Direct Labor $ Homycin 266,000.00 $ 235,000.00 $ Addolin 259,000.00 264,000.00 $ $ $ $ Overhead Total Cost Number of Capsules Cost per capsule 457,000.00 1,010,000 501,000.00 $ 501,000 523,000.00 301,000 Required 1 Required 2 Use the activity-based costing system to calculate the unit cost of each product. (Round intermediate calculations to 2 decimal places. Round "Cost per capsule" to 2 decimal places.) Addolin $ Direct Materials Direct Labor Diomycin 206,000.00 $ 251,000.00 $ Homycin 266,000.00 $ 235,000.00 $ 259,000.00 264,000.00 $ Overhead $ 457,000.00 $ $ Total Cost Number of Capsules Cost per capsule 501,000.00 501,000 523,000.00 301,000 1,010,000