Harwell, Incorporated, produces two products, Product A and Product B$.$ Harwell uses a traditional volume$-$based costing system in which direct labor hours are the allocation base. Harwell is considering switching to an ABC system by splitting its manufacturing overhead cost of $$650,000$ across three activitles: Setup, Production, and Finishing. Under the traditional volume$-$based costing system, the predetermined overhead rate is $$6\mathrm{.}50$ per direct labor hour. Under the ABC system, the rate for each activity and usage of the cost drivers are as follows.

Required:

a$.$ Calculate the indirect manufacturing costs assigned to Product A under the traditional costing system.

b$.$ Calculate the indirect manufacturing costs assigned to Product B under the traditional costing system

c$.$ Calculate the indirect manufacturing costs assigned to Product A under the ABC system.

d$.$ Calculate the indirect manufacturing costs assigned to Product B under the ABC system.

e$.$ Which product is undercosted and which is overcosted under the volume$-$based cost system compared to ABC?

Complete this question by entering your answers in the tabs below.

Required A

Required B

Required $C$

Required D

Requirined $E$

Calculate the indirect manufacturing costs assigned to Product A under the traditional costing system.

Indirect Manufacturing Costs