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20 Yarn Company produces two different yarn products, Cotton Yarn (Product A) and Wool Yarn (Product B). Yarn Company uses a traditional volume-based costing system

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20 Yarn Company produces two different yarn products, Cotton Yarn (Product A) and Wool Yarn (Product B). Yarn Company uses a traditional volume-based costing system in which direct labor hours are the allocation base. Yarn Company is considering switching to an ABC system by splitting its manufacturing overhead cost of $875,000 across three activities: Setup. Production, and Finishing Under the traditional volume-based costing system, the predetermined overhead rate is $8.75/direct labor hout. Under the ABC system, the rate for each activity and usage of the activity drivers are as follows: Deage by Usage by Cotton Yarn Wool Yarn Activity Rate Product Product 3) Setup (Batches) $ 100/hour 340 160 Production Direct Labor Hours) $ 3.00 49.500 50,500 Finishing Machine louro) $1,260 30 460 5 points SOS Required: a. Calculate the Indirect manufacturing costs assigned to Cotton Yarn under the traditional costing system. avec Manufactuto Coule b. Calculate the indirect manufacturing costs assigned to Wool Yarn under the traditional costing system Inn Mango 20 b. Calculate the indirect manufacturing costs assigned to Wool Yarn under the traditional costing system 5 Indre Manufacturing Couls c. Calculate the Indirect manufacturing costs assigned to Cotton Yarn under the ABC system d. Calculate the indirect manufacturing costs assigned to Wool Yarn under the ABC system, Induct Manufacturing Costs d. Calculate the Indirect manufacturing costs assigned to Wool Yarn under the ABC system Indired Manufacturing Costs e. Which product is under-costed and which is over-costed under the volume-based cost system compared to ABC? Product Product

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