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Pitney Company manufactures two products, Regular and Deluxe. The company recently began producing Deluxe. Since the new product was introduced, profits have been steadily declining, although sales of Deluxe product have been growing rapidly. Management believes that the accounting system may not be accurately allocating costs to products. Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on the direct$-$labor costs in the products. Last year$$s manufacturing overhead was $$8,880,000,$ based on production of $320,000$ units of Regular and $100,000$ units of Deluxe. Selling prices last year were $$34\mathrm{.}00$ for Regular and $$49\mathrm{.}00$ for Deluxe. Direct labor and direct material costs for last year were as follows: Regular Deluxe Total Direct labor $$1,740,000$ $ $660,000$ $$2,400,000$ Direct materials $1,250,0001,140,0002,390,000$ Management believes the following three activities cause overhead costs. The cost drivers and related costs are as follows: Activity Level Cost Assigned Regular Deluxe Total Number of production runs $$4,000,000400100500$ Quality tests performed $3,600,000120180300$ Shipping orders processed $1,200,0001,0005001,500$ Total overhead $$8,800,000$ REQUIRED: $($Note that the required includes parts A$,$ B$,$ and C below.$)$ A$.$ How much of the overhead will be assigned to each product if the three cost drivers are used to allocate overhead? What would be the total cost per unit produced for each product? $($Note: Round to the nearest cent, where applicable.$)(9$ marks$)3$ B$.$ How much of the overhead would have been assigned to each product if the direct$-$labor costs had been used to allocate overhead? What would have been the total cost per unit produced for each product? $($Note: Round to the nearest cent, where applicable.$)$

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