Utica Manufacturing (UM) was recently acquired by MegaMachines, Inc. (MM), and organized as a separate division within the company. Most manufacturing plants at MM use an ABC system, but UM has always used a traditional product costing system. Bob Miller, the plant controller at UM, has decided to experiment with ABC and has asked you to help develop a simple ABC system that would help him decide if it was useful. The controller's staff has identified costs for the first month in the four overhead cost pools along with appropriate cost drivers for each pool: Cost Pools Incoming inspection Production Costs Direct material cost 261.000 1,450,000 Machine-hours Setups Units Machine setup Shipping shipped The company manufactures two basic products with model numbers 308 and 510. The following are data for production for the first month as part MM: Products 308 S 60.000 16 510 $ 27,000 Total direct material costs Total machine-bours Total number of setups Total pounds of material 50 100 8,200 17,200 40.000 20.000 Number of units produced and shipped Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues be used? (Round intermedia calcula "Per unit cos answers to 2 decimal places.) ar 308 510 Total cost Per unit cost b. A consulting firm has recommended using an activity-based costing system, with the activities based on the cost pools identified by the cost accountant. What are the cost driver rates for the four cost pools identified by the cost accountant? (Round your answers to 2 decimal places.) Incoming inspection Production % of material dollars per machine-hour per setup Machine setup per unit Shipping cost pools i tsed? (Round intermediate calculations c. What unit product costs will be reported for the two products if the ABC system suggested by the cost accountant's classification and final answers to 2 decimal places.) 308 510 Total cost Per unit cost If management should decide to implement an activity-based costing system, what benefits should it expect? If management implemented an activity-based costing system it should be provided with a more thorough understanding of product costs. If management implemented an activity-based costing system it will increase the sales of the company