Arklan Production is upgrading its manufacturing process from a manual process to a highly automated system. Management believes that the new system will result in greater efficiencies and a better finished product. Arklan is also working on a plan to downsize staff after the implementation of the new system. Arklan has used a traditional absorption costing system to calculate unit product costs for external financial reporting. In the past, Arklan has allocated its manufacturing overhead costs using a predetermined plant-wide overhead rate based on direct labor hours. The controller realizes that the new system may require changing the overhead allocation process. Management plans to take the opportunity to reconsi der other improvements to the costing system