The C.W.C. Binck Company's Warrenton Division manufactures a variety of products, including Product 33 and Product 44.

Question:

The C.W.C. Binck Company's Warrenton Division manufactures a variety of products, including Product 33 and Product 44. Recently, competitors have introduced new products competing with product 44 and with other high-volume Warrenton products, and at prices substantially lower than Warrenton's prices. To better understand its product costs, Warrenton Division changed its costing system at the beginning of the most recent year and is considering changing it again.

Required:
(1) If OPICS had been used in the most recent year, what would have been reported as the total and unit costs of the two products? Use the same format as Exhibit 14-3, but omit the column for total costs of the division.
(2) Using TPICS, what are the total and unit costs of the two products? Use the same format as Exhibit 14-3, but omit the column for total costs of the division.
(3) Does TPICS constitute an ABC system? Why or why not?
(4) Using the proposed new costing system, what are the total and unit costs of the two products? Use the same format as Exhibit 14-3, but omit the column for total costs of the division.
(5) Does the proposed new costing system constitute an ABC system? Why or why not?
(6) Compared to TPICS, what new insight is revealed by the proposed new system?
(7) Make recommendations for Warrenton Division's management based on the results of the recent cost study and the results of requirement 6. In addition to pricing and product-line recommendations, include other options Warrenton should consider, and suggest how each possible action might be implemented.