A company is considering switching to an activity$-$based costing $($ABC$)$ system. The company produces and sells two products: Basic

and Pro. The production of the Pro products requires more expensive materials and more experienced workers. The company consists of

two departments: Production $($where all manufacturing activities are taken$)$ and Marketing $($which engages in selling and admin activity

only$).$ The company's traditional costing system computes unit product costs as dictated by GAAP; direct labor cost $($DLC$)$ is used as

the allocation base for manufacturing overhead cost $($the overhead rate is rounded to the nearest cent$).$ The ABC system will include in

unit costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups,

Special Processing, Factory Supervision, and Customer Relations.

In the ABC system, Customer Relations costs will be associated with customers; the rest of the costs will be associated with units of the

two products. $9\%$ of Customer Relations cost relates to manufacturing and is incurred in the Production Department; the rest of the

Customer Relations cost is incurred in the Marketing Department.