Hayden, Inc. produces two different products, Product A and Product B. Hayden uses a traditional volume-based costing system in which direct labor hours are the allocation base. Hayden is considering switching to an ABC system by splitting its manufacturing overhead cost across three activities: Engineering, Manufacturing, and Inspection. The cost of each activity and usage of the activity drivers are as follows:

	Cost		Usage by Product A	Usage by Product B
Engineering (Engineering Hours)	$	900,000	4,000	6,000
Manufacturing (Direct Labor Hours)	$	1,080,000	450,000	450,000
Inspection (Batches)	$	600,000	6,000	4,000

Hayden manufactures 14,350 units of Product A and 7,175 units of Product B per month. Required: a. Calculate the predetermined overhead rate under the traditional costing system. (Round your answer to 2 decimal places.)

b. Calculate the activity rate for Engineering. (Round your answer to 2 decimal places.)

c. Calculate the activity rate for Manufacturing. (Round your answer to 2 decimal places.)

d. Calculate the activity rate for Inspection.

e. Calculate the indirect manufacturing costs assigned to each unit of Product A under the traditional costing system. (Do not round intermediate calculations. Round your answer to 2 decimal places.) f. Calculate the indirect manufacturing costs assigned to each unit of Product B under the traditional costing system. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

g. Calculate the indirect manufacturing costs assigned to each unit of Product A under the ABC system. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

h. Calculate the indirect manufacturing costs assigned to each unit of Product B under the ABC system. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

i. Which product is under-costed and which is over-costed under the volume-based cost system compared to ABC?