Holt, Inc., recently introduced a new motor designed for refrigerators. Because this was a new product design, engineers had to make 100 engineering changes, but only 300 changes for its other more mature product lines. Holt, Inc. allocated its engineering change costs of

$100,000 along with other overhead in a single cost pool on the basis of machine-hours. An ABC study showed that engineering changes drive engineering change costs. Manufacturing the new motors accounted for 500 machine-hours of the 5,000 total machine-hours.

Required:

Concerning only the engineering change product-level costs, how much did the traditional cost system distort product-level costs for the new motor?