IV. Activity-based costing (19 points) The Fashion Shoe Company produces two different styles of shoes, casual shoes and dress shoes. The company uses a traditional costing system in which direct labor hours are the allocation base for manufacturing overhead. It is censidering switching to an ABC system by splitting its total manufacturing overhead cost of $1.600,000 across three activities as follows: Activity for casual shoes Activity for dress shoes 2,000 designing hours 8,000 designing hours 400,000 direct labor hours 400,000 direct labor hours Overhead cost poolCosts (activity measure) Designing Products $600,000 Designing hours) Materials order $800,000 (Direct labor hours) Inspection Batches $200,000 4,000 batches 1,000 batches a. Compute the activity rates for each of the three cost pools under ABC Ans:6 per designing hour 1000= 60 per direct labor hour 96 per batch 209 b. Calculate the total manufacturing overhead costs assigned to casual shoes under the ABC system. Ans: 6 80, 00 the manufacturing overhead costs assigned to csual shoss under the traditional c. Calculate the manu costing system. Ans: $