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 of $1,385,000 across three activities: Design, Production, and Inspection. Under the traditional volume-based costing system, the predetermined overhead rate is $2.77/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are as follows: Usage by Usage by Activity Rate Product A Product B Design (Engineering Hours) S 700/hour 200 300 Production Direct Labor Hours) S 1.35 200,000 300.000 Inspection (Batches) S 600 400 200 Required: a. Calculate the indirect manufacturing costs assigned to Product A under the traditional costing system. Indirect Manufacturing Costs b. Calculate the indirect manufacturing costs assigned to Product B under the traditional costing system. Indirect Manufacturing Costs c. Calculate the indirect manufacturing costs assigned to Product A under the ABC system. Indirect Manufacturing Costs d. Calculate the indirect manufacturing costs assigned to Product B under the ABC system. Indirect Manufacturing Costs e. Which product is under-costed and which is over-costed under the volume-based cost system compared to ABC? Product A Product B