This chapter emphasizes the use of activity-based costing in internal decisions. However, a modified form of activity-based costing can also be used to develop product costs for external financial reports. For this purpose, product costs include all manufacturing costs and exclude all nonmanufacturing costs. This problem illustrates such a costing system. Stiller Co. makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor hours. Data for the two products for the upcoming year follow: Direct materials cost per unit Direct labor cost per unit $3 $4 Direct labor hours per unit 040 0.80 Number of units proeduced 55,000 80,000 These products are customized to some degree for specific customers. a) The company's manufacturing overhead costs for the year are expected to be $1,720,000. Using the company's traditional costing system, compute the product cost per unit for the two products. Please make sure your final answer(s) are accurate to 2 decimal places. Product cost perunit___ b) Management is considering an activity-based system in which 40% of the overhead would continue to be allocated on the basis of direct labor hours and 60% would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year: Engineering design time (in hours) 8,600 12,900 21,500 Compute the product cost per unit for the two products using the proposed ABC system. Please make sure your final answer(s) are accurate to 2 decimal places. Product cost per unit__