Ch17 Case Study Assignment - Part 2 Activity Based Costing versus Traditional Costing Problem. Currently Paradise Industries is considering changing to an Activity Based Costing System due to increased sales, increased number of products, and a more complex manufacturing process with many activities. Paradise Industries has the following overhead costs and cost drivers. 1: Compute the total overhead costs assigned to Product B using activity based costing: Tip 1: ABC Overhead Rate = Estimated Overhead / Cost Driver Activity Tip 2: Product B Overhead = Product B activity x ABC Overhead Rate 2: Compute the total overhead costs assigned to Product B using traditional costing: Tip 3: Traditional Overhead Rate = Estimated Overhead / Cost Driver Activity Tip 4: Product B Overhead = Product B activity x Traditional Overhead Rate 3: Compute and compare ABC Overhead Costs to Traditional Overhead Costs for Product B: \begin{tabular}{|c|c|c|} \hline Current Traditional OH & Proposed ABC OH & Increase/(Decrease) \\ \hline (a) & (b) & (b - a) \\ \hline & & \\ \hline \end{tabular}