Exercise 7.25 Crane Products manufactures two component parts: AJ40 and AJ60. AJ40 components are being introduced currently, and AJ60 parts have been in production for several years. For the upcoming period, 1,100 units of each product are planned for manufacturing. Assume that the only relevant overhead cost is for engineering change orders (any requested changes in product design or the manufacturing process). AJ40 components are expected to require 4 change orders and AJ60 only 2. Each AJ40 requires 1 machine hour, and each AJ60 requires 1.5 machine hours. The cost of a change order is $300. IZI Your answer is incorrect. Try again. Estimate the cost of engineering change orders for A140 and AJ60 components if Crane uses a traditional costing method and machine hours as the allocation base. (Round machine hour rate to 2 decimal places, e.g. 25.69 and nal answers to 0 decimal places, 9.9. 5,275.) X . Total allooaaoo coat for mo m: X . Total allooaloo oooa lo. Alon m; SHOW SOLUTION LINK TO TEXT LINK TO TEXT Now suppose that Crane uses an ABC system and allocates the cost of change orders by using as cost driver the number of change orders. Estimate the cost for change orders for each unit of AJ40 and AJ60. Total allocated cost for AJ40 X Total allocated cost for AJ60 X SHOW SOLUTION LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Calculate the difference in overhead allocated to each product. (Round answers to 0 decimal places, e.g. 5,275. Show an undercharge preceded by a minus sign, e.g. -256 or (256).) Overcharge (Undercharge) for AJ40 to.. x Overcharge (Undercharge) for AJ60 X