TikTok Electronics manufactures an aluminium fibre tripod model "TRI-X which sells for $1,600. The production cost computed per unit under traditional costing for each model in 2019 was as follows: $700 Traditional Costing TRIX Direct Materials Direct Labour ($20/hour) $120 Manufacturing overhead ($38 per DLH) $228 Total per unit cost $1.048 In 2019, TikTok Electronics manufactured 26,000 units of TRI-X. Under traditional costing the gross profit on TRI-X was $552 ($1,600-$1,048), Management is considering phasing out TRI- X as it has continuously failed to reach the gross profit target of $600. Before finalizing its decision, management asks TikTok Electronics management accountant to prepare an analysis using activity-based costing (ABC). The management accountant accumulates the following information about overhead for the year ended December 31, 2019. 3 cowity cost Cost Drivers Estimated Expected Use of Pools Overhead Cost Drivers Purchasing Number of $1,200,000 40,000 orders Machine setups Number of 900,000 18,000 setups Machining Machine hours 4,800,000 120,000 Quality Control Number of 700,000 28,000 inspections The cost drivers used: Cost Drivers TRI-X Product Purchase orders 17,000 Machine setups 5,000 Machine hours 75,000 Inspections 11,000 Required: 1. Calculate the activity rates for each of the overhead items using the four cost drivers. (3 marks) 2. Using the rates in (1) determine the unit cost for TRI-X. (4 marks) 3. Calculate the gross profit of each model of TRI-X based on ABC costings and recommend whether or not TRI-X should be discontinued. (4 marks)