Explain briefly why these numbers differ from the gross margin per unit of the Maximum and Mammoth models calculated using Pratt$\text{'}$s existing simple costing system. Pratt$\text{'}$s simple costing system allocates all manufacturing overhead other than machine costs on the basis of $.$Consequently$,$ the $$ more direct labor$-$hours more machine$-$hours more units sold per unit that a product$$ needs, the$$ greater lesser the manufacturing overhead allocated to it using the simple costing system. Because Mammoth $$ uses the same number of direct labor$-$hours uses the same number of machine$-$hours uses twice the number of direct labor$-$hours uses twice the number of machine$-$hours sold the same number of units sold twice the number of units per unit compared to Maximum$,$ a larger a smaller the same amount of manufacturing overhead is allocated to Mammoth. The ABC system recognizes Maximum$\text{'}$s $$ less intensive more intensive similar use of manufacturing overhead and results in Maximum showing $$ a much higher a much lower the same profitability. By the same$$ token, the ABC analysis shows that Mammoth is $$ not very quite profitable. The simple costing system $$ overcosted undercosted Mammoth and so made it appear $$ less more profitable. Part $4$ Requirement $3.$ Comment on Carter$\text{'}$s concerns about the accuracy and limitations of ABC. $($Select all that$$ apply.$)$ A$.$ When designing and implementing ABC$$ systems, it is not necessary for managers and management accountants to trade off the costs of the system against its benefits. B$.$ Using$$ inspection$-$hours and$$ setup$-$hours as allocation bases would also probably lead to more accurate cost$$ information, but it would increase measurement costs. C$.$ Using$$ inspection$-$hours and$$ setup$-$hours as allocation bases would probably not lead to more accurate cost information and would also have no effect on measurement costs. D$.$ Carter$\text{'}$s comments about ABC implementation are valid. E$.$ Carter$\text{'}$s comments about ABC implementation are not valid. F$.$ Adding more activities would make the system harder to understand and more costly to$$ implement, but it would probably improve the accuracy of cost$$ information, which, in$$ turn, would help Pratt make better decisions. G$.$ Adding more activities would have no impact on the complexity of the system and should be inexpensive to implement. It would not necessarily improve the accuracy of cost information and therefore may not improve decision making. H$.$ When designing and implementing ABC$$ systems, managers and management accountants need to trade off the costs of the system against its benefits. Part $5$ Requirement $4.$ How might Pratt find the ABC information helpful in managing its$$ business? $($Select all that$$ apply.$)$ A$.$Activity$-$based management$($ABM$)$ is a management system where each component in a production line is manufactured only when it is needed in the next step of the process. B$.$ ABM is an integrated approach that focuses$$ management's attention on analyzing the direct costs incurred in the manufacturing process with the ultimate aim of cost reduction. C$.$Activity$-$based management$($ABM$)$ is the use of information from$$ activity$-$based costing to make improvements in a firm. D$.$ For the long$$ term, activity$-$based costing can assist management in making decisions regarding the productivity of the employees. E$.$Activity$-$based management is an integrative philosophy of management for continuously improving the quality of products and processes by focusing primarily on the direct labor costs. F$.$ As a$$ whole$-$company philosophy, ABM focuses on$$ strategic, as well as tactical and operational activities of the company. G$.$ ABM is an integrated approach that focuses$$ management's attention on activities with the ultimate aim of continuous improvement H$.$ For the long$$ term, activity$-$based costing can assist management in making decisions regarding the viability of product$$ lines, distribution$$ channels, marketing$$ strategies, etc. I. ABM highlights possible$$ improvements, including reduction or elimination of$$ non$-$value$-$added activities, selecting lower cost$$ activities, sharing activities with other$$ products, and eliminating waste. Part $6$ Requirement $5.$ What should Sam Jacobi do in response to Carter$\text{'}$s $$comments$?($Select all that$$ apply.$)$ In assessing the$$ situation, first consider the$$ "Standards of Ethical Conduct for Management$$ Accountants" that could potentially be violated in this situation. A$.$ Credibility B$.$ Integrity C$.$ Confidentiality D$.$ Competence E$.$ None of the standards are potentially violated in this situation. Part $7$ What should Sam Jacobi do in response to Carter$\text{'}$s $$comments$?$ A$.$ Incorrect reporting of ABC costs with the goal of retaining both the Mammoth and Maximum product lines is ethical. Jacobi has the obligation to follow the wishes of his immediate supervisor. Raising the mat