1. Calculate the indirect manufacturing costs assigned to each unit of Product A under the ABC system. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

2. Calculate the indirect manufacturing costs assigned to each unit of Product B under the ABC system. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

3. Which product is under-costed and which is over-costed under the volume-based cost system compared to ABC?

Carter, Inc. produces two different products, Product A and Product B. Carter uses a traditional volume-based costing system in which direct labor hours are the allocation base. Carter is considering switching to an ABC system by splitting its manufacturing overhead cost across three activities: Design, Production, and Inspection. The cost of each activity and usage of the activity drivers are as follows: Usage by ctA 350 S642,500 15,000 450 Usage by Product B 450 315,000 250 Cost Produ $440,000 Design (Engineering Hours) Production (Direct Labor Hours) Inspection (Batches) S315,000 Carter manufactures 11,500 units of Product A and 9,000 units of Product B per month