Math 13 Fall 2019-Exam 1 Ve Direction: Read each question 21 The following d Lutz, Inc. produces three products: Quality, Superior, and Superb. The Lutz cost accounting system applied Conversion Costs using a Plant-Wide Application Rate using Direct Labor Hours as the Cost Driver. Lutz is thinking of employing an ABC system for Conversion Costs Lutz concluded that its plant had six activities with the following Cost Drivers and costs budgeted for the upcoming year Activity Area Budgeted Costs Cost Driver Material Handling $ 258,400 Number of parts 646,000 Production Scheduling 114,000 Number of prod. orders Setups 160,000 Number of prod. setups Machinery Cost & Maintenance 3.510,000 Machine hours Finishing 1,092,000 Direct Labor Hours Packaging & Shipping 190,000 Number of orders shipped Total $5.324.400 It is estimated that there will be 54,600 Direct Labor Hours in the upcoming year. The following information summarizes Lutz' projections of the Cost Drivers listed above down by product type. Plantwide=195.04 C 8 Quality 10,000 Superior 5,000 50 70 30 Cost Driver Units to be produced Number of parts per unit Production orders Production setups Machine hours per unit Direct Labor Hours per unit Orders shipped 300 100 Superb 800 120 200 50 15 12 800 50 2,000 y wil 1,000 $69.11 $83.00 Direct Labor $72.50 $97.00 $83.22 $115.00 Direct Material per unit Lutz uses a 30% markup above cost to bid their projects. What are the costs they curr use with the Plant wide model? What should the prices be if we used ABC and what the difference suggest we might be doing wrong with our bids