Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: The Deluxe and the Regular. At the beginning of the year 2019, the following data were prepared for this plant:

	Deluxe	Regular
Quantity	20 000	80 000
Selling price	$90	$75
Unit direct cost	$53	$48

In addition, the following information was provided so that overhead costs could be assigned to each product:

Activity name	Activity Cost	Activity driver	Deluxe	Regular
Set-up	$200,000	Number of set-up	3 000	5 000
Machining	800,000	Machine hours	10 000	30 000
Engineering	600,000	Engineering hours	100 000	50 000
Packing	100,000	Packing orders	1 000	4 000
Total overhead costs	$1,700,000

Required:

1. Calculate the production overhead cost allocated to each product in 2019 using machine-hours as the cost driver (traditional costing system).
2. Calculate the production overhead cost allocated to each product in 2019 using the Activity-based approach to costing system.
3. Comment on your answers in requirements 1 and 2 and identify which product was most likely to be overstated under the traditional costing system.