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Coronado, Inc manufactures specialty toys. Trendy uses a traditional product costing system to assigroverhead costs uniformly to all products. To meet industry safety standards and

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Coronado, Inc manufactures specialty toys. Trendy uses a traditional product costing system to assigroverhead costs uniformly to all products. To meet industry safety standards and to assure its customers of safe and durable toys, Trendy assigns its quality-control overhead costs to all products at a rate of 23% of direct labor costs. Its direct labor cost for the month of August for its toddler iine of toys is $331,000, In response to repeated requests from its financial vice president. Trendys management agrees to adopt activitybased costing, Data relating to the toddler line of toys for the month of August are as follows: (a) Compute the quality-control overhead cost to be assigned to the toddier toy line for the month of August (1) using the traditional product costing system (direct labor is the cost driver), and (2) using activity-based costing

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