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. Costs 258,000 1,520,000 670,000 Activity Drivers Direct material cost Cost Pools Incoming inspection Production Machine-hours Machine setup Setupa Units shipped Shipping 240,000 The company manufactures two basic products with model numbers 308 and 510. The following are data for production for the first month as part of MM. Products 308 510 $ 55,000 $172,000 58,000 $ 31,000 $202,000 102,000 Total direct material costs Total direct labor costs Total machine-hours Total number of setups Total pounds of material 54 80 18,200 6,200 20,000 9,200 9,200 10,000 Total direct labor-hours 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 to be used? 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? c. What unit product costs will be reported for the two products if the ABC system suggested by the cost accountant's classification of cost pools is used? mont chould decide to imploment vity haeed corting evetem what+ henefite chould it ovnoct?