How to answer the required questions in Problem 5???......

PROBLEM 5 Comparison of ABC and Traditional Costing; Two Products BL Company produces two products, Baby and Love, and uses a costing system in which all overhead is accumulated in a single cost pool and allocated based on machine hours. BL's management has decided to implement ABC because a cost study has revealed significant amounts of overhead cost related to setup activity and design activity. The number of setups and the number of design hours will be the activity drivers for the two new cost pools, and machine hours will continue as the base for allocating the remaining overhead. Selected information follows for BL Company's most recent year of operations: Baby Love Total Units produced 500 15,500 16,000 Direct material $200 $20 cost (per unit) Direct labor cost $50,000 $350,000 $400,000 (total) Machine hours 3,000 47.000 50,000 Setups 120 80 200 Design hours 6.000 4.000 10.000 Overhead: Setup-related $250,000 Design-related $350,000 Others $900,000 Required: (1) Calculate the total and per-unit costs reported for the two products by the existing costing system. (2) Calculate the total and per-unit costs reported for the two products by the ABC system