Exercise 7.26 Bonita Company produces two Products: MB-R and MB-X. Currently, Bonita allocates overhead based on direct labour h urs. Overhead is estimated at $321,400. The cost accountant realizes that there are some differences in how resources are being used in producing these two components and is considering the use of ABC to allocate overhead. She determines that overhead is caused by testing and inspections, 109.200; machine setup, $72,000; machine stamping, $96,000; and plant maintenance, $44,200. Bonita estimates the following activities related to the overhead costs; Testing and inspections Number of testing and inspections Machine setup Machine stamping Plant maintenance 420 60 21,000 11,000 1,200 2,200 420 140 Number of setups Number of machine hours Direct labour hours Use ABC cost hierarchy to classify each activity. Cost Driver Testing and inspections Machine setup Machine stamping Plant maintenance LINK TO TEXT LINK TO TEXT Compute the amount of overhead assigned to each product using the traditional.e direct labour hours) costing method. (Round labor rate per hour to 2 decimal places, e.g. 52.75 and the final answers to o decimal places, e.g. 5,275.) MB-R MB-X LINK TO TEXT LINK TO TEXT Compute the amount of overhead assigned to each product using ABC Activity Testing and inspections Machine setup Machine stamping Plant maintenance MB-R OH MB-X OH Which product is overcosted using the traditional costing method? Overcosted product LINK TO TEXT LINK TO TEXT UNK