Seattie Grace Corporation manufactures two modells of a medical device: Modet 101 and Model 102. Below is the current year production data for the company. Model 101 Direct material in units Model 1O2 Direct labor hours 97.000 113,000 Machine hours Number of setups Number of devices produced vnes 30.000 26,000 300 16,000 40,000 13,000 600 6.000 The 210.000 units of material had a total cost of $1.365.000. Direct labor is $17 per hour. The company has total overhead production costs of $1,850.000. a. Ef Seattie Grace Corporation applies factory overhead using direct labor hours (traditional costing). compute the total product cost and the unit product cost for each model. b. Assume that Seattle Grace Corporation has established the folliowing activity centers, costs drivers. and costs to apply factory overthead. Compute the total product cost and the unit product cost for each model. Cost Driver # of machine hours # of setups Units of Materials # of devices produced Volume 39,000 900 210,000 24,000 Cost Pool Equipment Maintenance Production Setup Material Handling Transportation Costs Cost $585.000 $125.00O $540,00O s600.000 c. Explain why the unit cost for each model is different between the two methods of overhead application. How can such information benefit an organization? Page 2 of 3