The Ojibway Company produces two products, Basic and Deluxe. The company currently uses a traditional costing system and accumulates all manufacturing overhead costs in a single cost pool and allocates these costs to production based on direct labor costs. Ojibway's management has heard about activity based costing (ABC) and would like to determine what effect it would have on costing their individual products. They instructed the production and finance departments to undertake a joint study of their current system and the study revealed that significant amounts of the company's manufacturing overhead costs are related to setup activity and design activity. As a result of the study, the company has decided to use the number of setups and the number of design hours as the activity cost drivers for two new cost pools that have been created for costs related to these areas. The company will continue to use direct labor costs as the base for allocating all other remaining overhead. Information concerning Ojibway Company's most recent year of operations is attached. The manufacturing overhead for the recent year is also attached. REQUIRED: (1) Prepare a schedule that shows the total costs and costs per unit for each product using the company's existing traditional costing system. Round all allocation rates to five decimal places. Round all total costs to the nearest whole dollar and all costs per unit to the nearest cent. Prepare a schedule that shows the total costs and costs per unit for each product using the new ABC system that the company would like to implement. Round all allocation rates to five decimal places. Round all total costs to the nearest whole dollar and all costs per unit to the nearest cent. (2) OJIBWAY COMPANY ACTUAL RESULTS FOR OPERATIONS FOR MOST RECENT YEAR BASIC Units Produced Direct Material Cost Direct Labor Cost $ DELUXE 5,000 100,000 50,000 100 20,000 75,000 900,000 $ 600,000 $ 50 5,000 $ Setups Design Hours OJIBWAY COMPANY ACTUAL MANUFACTURING OVERHEAD FOR MOST RECENT YEAR Setup Related Manufacturing Overhead Design Related Manufacturing Overhead Other Manufacturing Overhead $ 250,000 1,000,000 2,250,000