Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at the Warren production facility allocates overhead cost on the basis of direct labor hours. The company is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. A study team composed of the production facility's finance and operations groups has identified three overhead cost pools along with appropriate cost drivers for each pool. Cost Pools Assembly Setup: Quality assurance Costs $ 2,295,000 1,044,000 621,000 Activity Drivers Direct labor-hours Number of setups Number of tests The plans for production for the next year and the budgeted direct costs and activity by product line are as follows: Products Ergo Basic Direct costs (material and labor) $ 1,166,400 Direct labor-hours 25,200 Machine-hours 26,400 Number of setups Number of tests Number of units produced 48 140 7,200 $ 1,164,000 12,000 14,400 72 $ 902,400 7,800 12,000 120 100 3,000 60 1,200 Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? 1. Assembly 2. Setup 3. Quality assurance Complete this question by entering your answers in the tabs below. Number of units produced Required: 7,200 3,000 1,200 a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? 1. Assembly 2. Setup 3. Quality assurance Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? Total cost Per-unit cost Basic Ergo Required A Required B > Number of units produced Required: 7,200 3,000 1,200 a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? 1. Assembly 2. Setup 3. Quality assurance Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E What are the cost driver rates for the three cost pools identified by the study team? Note: Round your final answer to the nearest whole dollar. Assembly Setup Quality assurance per direct labor-hour per setup per test Number of units produced Required: 7,200 3,000 1,200 a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? 1. Assembly 2. Setup 3. Quality assurance Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? Note: Round "Per unit cost" answers to 2 decimal places. Total cost Per-unit cost Basic Ergo Exec