Digital Solutions, Inc., manufactures two component parts for the television industry: Voltage Regulator: Annual production and sales of 50,000 units at a selling price of $52.50 per unit. Mother Board: Annual production and sales of 25,000 units at a selling price of $72 per unit. Digital Solutions includes all R&D and design costs in engineering costs. Assume that Digital Solutions has no marketing, distribution, or customer-service costs. The direct and overhead costs incurred by Digital Solutions on the Voltage Regulator and Mother Board are described as follows: Total Voltage Mother Regulator Board $1,020,000 $720,000 360,000 240,000 180,000 120,000 $1,740,000 600,000 300,000 Direct materials costs (variable) Direct manufacturing labor costs (variable) Direct machining costs (fixed) Manufacturing overhead costs: Machining setup costs Testing costs Engineering costs Manufacturing overhead costs Total costs 112,500 600,000 480,000 $1,192,500 $3,832,500 Digital Solution's management identifies the following activity cost pools, cost drivers for each activity, and the costs per unit of cost driver for each overhead cost pool: Activity Description Cost Driver Cost per Unit of Cost Driver $30 per setup-hour $2.40 per testing hour Setup Preparing the machine to manufacture Setup hours a new batch of products Testing Testing components and final product Testing hours (each unit is tested individually) Engineering Designing products and processes and complexity of ensuring their smooth functioning product and process Costs assigned to products by special study Digital Solutions, Inc., manufactures two component parts for the television industry: Voltage Regulator: Annual production and sales of 50,000 units at a selling price of $52.50 per unit. Mother Board: Annual production and sales of 25,000 units at a selling price of $72 per unit. Digital Solutions includes all R&D and design costs in engineering costs. Assume that Digital Solutions has no marketing, distribution, or customer-service costs. The direct and overhead costs incurred by Digital Solutions on the Voltage Regulator and Mother Board are described as follows: Total Voltage Mother Regulator Board $1,020,000 $720,000 360,000 240,000 180,000 120,000 $1,740,000 600,000 300,000 Direct materials costs (variable) Direct manufacturing labor costs (variable) Direct machining costs (fixed) Manufacturing overhead costs: Machining setup costs Testing costs Engineering costs Manufacturing overhead costs Total costs 112,500 600,000 480,000 $1,192,500 $3,832,500 Digital Solution's management identifies the following activity cost pools, cost drivers for each activity, and the costs per unit of cost driver for each overhead cost pool: Activity Description Cost Driver Cost per Unit of Cost Driver $30 per setup-hour $2.40 per testing hour Setup Preparing the machine to manufacture Setup hours a new batch of products Testing Testing components and final product Testing hours (each unit is tested individually) Engineering Designing products and processes and complexity of ensuring their smooth functioning product and process Costs assigned to products by special study