Unit-based system: Variable conversion activity rate: $100 per direct labor hour Material usage rate: $20 per part ABC system: Labor usage: $15 per direct labor hour Material usage (direct materials): $20 per part Machining: $75 per machine hour Purchasing activity: $150 per purchase order Setup activity: $3,000 per setup hour Warranty activity: $500 per returned unit (usually requires extensive rework) Customer repair cost: $25 per repair hour (average) Activity and Resource Information (annual estimates) Units produced Design A Design B 25,000 25,000 Direct material usage 300,000 parts 275,000 parts Labor usage 50,000 hours 120,000 hours Machine hours 50,000 60,000 Purchase orders 2,000 1,500 Setup hours 600 200 Returned units 1,000 250 Repair time (customer) 2,000 500 Required: 1. Select the lower-cost design using unit-based costing. Design A Are logistical and post-purchase activities considered in this analysis? No 2. Select the lower-cost design using ABC analysis. Design B 3. What if the post-purchase cost was an environmental contaminant and amounted to $10 per unit for Design A and $40 per unit for Design B? Compute the Post-purchase cost for each design. Post-Purchase Cost Design A Design B 784 x 784 X