HYGIENE Ltd manufactures custom made "vacuum cleaners". At the moment the company has two types of products on the market, the"Zoom"and the"Hoover". The company currently uses a traditional costing system and allocates overhead costs based on anestimated 50,000 direct labour hours.The following cost information has been used as a basis for pricing decisions over the past year.

Per unit dataZoomHooverDirect labour hours1.52.5Direct labour cost per hour$13$15Number of units produced35,00025,000

The new company controller Ms Bossy considering the use of Activity Based Costing to apply overhead and has collected the following data:

Number of eventsActivity centreCost DriverTraceable costsZoomHooverSet upsnumber of setups$100,000100100Special designDesign hours$364,000900100PackagingPackaging orders$900,00015,00035,000MachiningMachine hours$300,009,0001,000Total manufacturing overhead costs$1664,000

Required: (where necessary round off answer to 2 decimal places)

3. Calculate the aggregate amount by which Type 1 product line is undercosted/overcosted by the company's current traditional overhead costing procedures. Then calculate the aggregate amount by which the traditional system undercosts/overcosts Type 2 product line.