Marigold, |nc.. uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products. To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Marigold engages in a high level of quality control. Marigold assigns its quality-control overhead costs to all products at a rate of 17% ofdirect labor costs. Its direct labor cost for the month ofJune for its low-calorie breakfast line is $68,000. In response to repeated requests from its nancial vice president, Marigold's management agrees to adopt activity-based costing. Data relating to the low-calorie breakfast line for the month of June are as fol lows. Overhead Activity Cost Pools Cost Drivers Rate Inspections of material received Number of pounds $0.90 per pound In-process inspections Number of servings $0.33 per serving FDA certication Customer orders $12 .00 per order X Your answer is incorrect. Number of Cost Drivers Used per Activity 6,300 pounds 10,000 servings 430 orders 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 l[direct labor cost is the cost driver}, and [2) using activity-based costing. Traditional product costing Activity-based costing Quality-control overhead cost to be assigned $ |$l By what amount does the traditional product costing system undercost or overcost the low-calorie breakfast line? Undercost eTextbook and Media Your answer is correct. Classify each of the activities as value-added or non-value-added. Activites Inspections of material received Non-value-added In-process inspections Non-value-added FDA certification Non-value-added