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Activity Based Costing Problem Zannon Corporation manufactures a Blu-ray Player available in two models: the Z100, Z200 Despite the growing popularity of the Z200 model, company profits have been d steadily, and management is beginning to think there might be a problem with their cos system. Material and labour costs per unit are presented in the chart below: Z100 Z200 Direct Materials $45 $60 The company's estimated total overhead is $600,000 for the coming period. It applies manufacturing overhead on the basis of direct labour hours. The Z200 is the more com product, requiring 4 hours of direct labour to manufacture, while the 2100 is less comp requiring only 3 hours of direct labour. 30,000 units of Z100 and 15,000 units of Z200 produced and sold. Management is considering a shift to activity-based costing. The following information available relating to the company's activity pools Estimated Overhead Expected Activity Activity Cost Pool and Activity Measure Cost Z100 Z200 Total Parts Management (Number of parts) 150,000 250 750 1,000 Product Testing (Number of tests run) 90.000 350 150 500 Required: #1 Assume that the company continues to use direct labour hours as a basis for applyin overhead costs. b. ) Compute the predetermined overhead rate. Compute the unit product cost. #2 Assume that the company shifts to activity-based costing. a) Compute the activity rate for each of the activity cost pools and determine t b.) of overhead cost that would be applied to each model using activity based c Compute the unit product cost of each model. #3 a ) Under traditional costing, is the model 2100 overcosted or undercosted? By ho b.) Under traditional costing, is the model Z200 overcosted or undercosted? By ho

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