Refer to Problem 4.49. You have just discovered that the product manager of product A has been less than honest in reporting the number of direct-labor hours used. In checking the payroll records, you discover that 2,000 direct-labor hours ($20,000 direct-labor costs) actually were used in July to produce Product A, not 1,600 hours as the product manager reported.

Required —

a. Using this new information, recompute the total and unit costs for product A for July using both the activity-based and traditional costing systems.

b. Does this new information significantly affect the cost numbers using either traditional or ABC systems?

c. Does this new information affect the cost computations for product B using either the activitybased or traditional costing systems?

d. Why might the product manager of product A have understated the number of direct-labor hours used to produce it?