2.5/5 E Question 4 of 7 View Policies Show Attempt History Current Attempt in Progress Carla Vista has budgeted overhead costs of $1,016,700. It has assigned overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours, which are estimated to be 508,350 for the current year. The company has decided to experiment with activity based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $376,200 and $640,500 is allocated to the design cost pool. Additional information related to these pools is as follows. Machine hours Number of setups Wool 99.000 1.220 Cotton 99,000 610 Total 198,000 1,830 (a) Your Answer Correct Answer Your answer is correct Determine the amount of overhead assigned to the wool product line and the cotton product line using activity-based costing (Round rate per unit to 2 decimal places, eg. 1.25 and final answers to decimal places, e3.5,125.) Cutting Design Activity-based overhead rates per machine hour per setu $ 1.90 $ 350 Wool Cotton Overhead assigned 615100 401600 eTextbook and Media Solution Attempts: 3 of 3 used (b) (b) What amount of overhead would be assigned to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton? How does this compare with the amount assigned using ABC in part above? (Round rate per direct labor hour to 2 decimal places, eg. 1.25 and final answers to decimal places, eg. 5,125. Enter negative answers using either a negative sign preceding the number eg.-2,945 or parentheses es. (2,9451) Overhead rate using traditional approach $ per direct labor hour Traditional costing (B) Difference (A)-(B) Activity-based costing (A) $ Wool $ Cotton $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit