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 $1,168,000 across three activities: Design, Production, and Inspection. Under the traditional volume-based costing system, the predetermined overhead rate is $2.92/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are as follows:

	Activity Rate			Usage by Product A			Usage by Product B
Design (Engineering Hours)	$	800	/hour		150			250
Production (Direct Labor Hours)	$	1.50			100,000			300,000
Inspection (Batches)	$	620			300			100

Required:

a. Calculate the indirect manufacturing costs assigned to Product A under the traditional costing system.

b. Calculate the indirect manufacturing costs assigned to Product B under the traditional costing system.

c. Calculate the indirect manufacturing costs assigned to Product A under the ABC system.

d. Calculate the indirect manufacturing costs assigned to Product B under the ABC system.

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