Problem 9-63 and 9-64 (Static) [The following information applies to the questions displayed below] Lauder Company manufactures and distributes various fixtures used primarily in new building construction. At the company's Bayside plant, Lauder produces two models of one widely used fixture designated by model names LC-20 and LC-50. Currently, the Bayside plant uses direct labor-hours to allocate manufacturing overhead costs to products. The vice president-manufacturing (VP-M) at Lauder has recently been considering updates to the company's costing systems as a way to ensure that managers had the best information available for decision making. However, rather than update throughout the entire firm, the VP-M and CFO agreed to test an ABC system. Because of its size and focus, the Bayside plant was selected for the experiment. An ABC study team, consisting of both plant and corporate employees was formed to propose an ABC system and compare the product costs with those reported by the current system. Based on the experiment, the executives at Lauder will decide whether to roll out the new cost system to the entire company. The study team identified four cost pools into which the manufacturing overhead costs could be grouped. There was a great deal of discussion about both the pools and the cost drivers. The final system selected consisted of the following pools and drivers. The costs were based on the forecasts for the coming year. Cost Pools Costs s 396,000 Material inspection Assembly 2,210,000 Machine-hours Production runs Equipment setup 790,000 Packaging and shipping 420,000 Units shipped Data for production of the two products at the Bayside plant for the coming year of operations follows Products Activity Drivers Direct material cost LC-20 $540,000 $ 420,000 92,125 75 240,000 Total direct material casts Total direct labor costs Total machine-hours Total number of production runs Number of units produced and shipped All direct labor at the Bayside plant is paid $35 per hour LC-50 $ 180,000 $ 210,000 46,000 50 60,000