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 of $3,500,000 across three activities: Engineering, Manufacturing, and Inspection. Under the traditional volume-based costing system, the predetermined overhead rate is $6.75/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are as follows:

	Activity Rate			Usage by Product A			Usage by Product B
Engineering (Engineering Hours)	$	440	/hour		3,900			17,500
Manufacturing (Direct Labor Hours)	$	1.00			1,350,000			1,350,000
Inspection (Batches)	$	800			3,050			8,600

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