ABC vs. Traditional Costing Systems Comparison Nutty Co. makes two variety of snack mixes: Sweet and Spicy. Since the Snack-o-matic is the primary driver of costs for both bagged mixes, Nutty Co. currently uses a traditional costing system to assign MOH costs, on the basis of direct labor-hours. Additional information: \begin{tabular}{|l|l|} \hline Total estimated manufacturing overhead costs & $589,300 \\ \hline \end{tabular} Compute the predetermined overhead rate assuming that the company continues to apply the manufacturing overhead cost on the basis of direct labor-hours. Then calculate the unit product cost of each product. Nutty is considering an Activity Based Costing approach. Below are the listed activities and estimated activity for each. Calculate the activity rates, and the unit product costs for each kind of bagged snack using the ABC approach. Nutty Co. currently charges $20 per bag. Which costing approach would be more profitable for Nutty Co.? Explain. (Show calculations to support your answer.) Type your answer here