high-intensity prouuc E4-11 Health R Us, Inc., uses a traditional product costing system to assign overhead As costs uniformly to all its packaged multigrain products. To meet Food and Drug Adminis- tr tration requirements and to assure its customers of safe, sanitary, and nutritious food, cl Health 'R Us engages in a high level of quality control. Health 'R Us assigns its quality- Control overhead costs to all products at arte of 17% of direct labor costs. Its direct labor ( cost for the month of June for its low-calorie breakfast line is $70,000. In response to repeated requests from its financial vice president, Health 'R Us's management agrees to adopt activity-based costing. Data relating to the low-calorie breakfast line for the month of June are as follows. Overhead Rate Number of Cost Drivers Used per Activity Activity Cost Pools Inspections of Cost Drivers material received In-process inspections FDA certification Number of pounds $0.90 per pound Number of servings $0.33 per serving Customer orders$12.00 per order 10,000 servings 420 orders Instructions (a) Compute the quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June (1) using the traditional product costing system (direct labor cost is the cost driver), and (2) using activity-based costing. (b) By what amount does the traditional product costing system undercost or overcost the (c) Classify each of the activities as value-added or non-value-added. low-calorie breakfast line