Whitaker Company produces two models of blenders for restaurants: the "Super Madel" (priced at $403) and the "Special Model (priced at $205). Recently, Whitaker has been losing market share with its Special Model because of competitors offering blenders with the same quality and features but at a lower pnce. A careful market study revealed that if Whitaker could reduce the price of its Special Model to $185, it would regain its former share of the market. Management, however, is convinced that any pnce reduction must be accompanied by a cost reduction of the same amount so that per-unit profitability is not affected. James Davis, company controller, has indicated that poor overhead costing assignments may be distorting management's view of each product's cost and, thereure, the ability to know how to set selling prices. James esitleriLilied the followiny overhead activities: machininy, inspection, and rework. The three activities, their custs, and practical capacities are as follows: Activity Cost Practical Capacity Machining $5,133,000 88,500 machine hours Inspection 1,60D,100 45,000 inspection hours Rework 1,774,600 46,700 rework hours The consumption patterns of the two products are as follows: Special Super Units 100,000 34,600 Machine hours 18,400) Inspection hours 10,400 34,600 Rework hours 8,000 38,700 Whitaker assigns overhead costs to the two products using a plantwide rate based on machine hours. Required: 1. Calculate the unit overhead cost of the Special Model using machine hours to assign overhead costs. Round intermediate calculations and your final answer to the nearest cent, if rounding is required. per unit Now, repeat the calculation using ABC to assign overhead costs. Round intermediate calculations and your final answer to the nearest cent, if rounding is required. per unit Did improving the accuracy of cost assignments solve Whitaker's competitive problem? 2. Now, assume that in addition to improving the accuracy of cost assignments, James observes that defective supplier components are the root cause of both the inspection and rework activities. Suppose further thet Whitaker has found a new supplier that provides higher-quality components such that inspection and rework costs are reduced by 50 percent. Now, calculate the cost of the Special Model (assuming that inspection and rework times are also reduced by 50 percent) using ABC. The relative consumption patterns also remain the same. Round intermediate calculations and your final answer to the nearest cent, if rounding is required. per unit Comment on the difference between ABC and ARM 3. In Requirements 1 and 2, identity which of the data analytic types apply (descriptive, diagnostic, predictive, and prescriptive). See Exhibits 2.5 and 2.6, pp. 37, 40, for a brief review of data analytic types