Problem 3 (Textbook Reference: P4-4) - Activity-based costing versus traditional costing C&W Corporation manufactures travel clocks and watches. Overhead costs are currently allocated using direct- labor hours, but the controller has recommended using an activity-based costing system based on the following data Activity Level Cost Driver Setups Parts Units shipped $ 60,000 Activity Cost $100,000 $ 30,000 Travel ClocksWatches 30 36 80,000120,000 20 24 Production setup Material handling and requisition Packaging and shipping Total overhead $190,000 Required: 4. Compute the amount of total overhead allocated to each of the products under activity-based costing: Travel Clocks Watches 5. Compute the amount of total overhead allocated to each of the products using labor-hours as the allocation base. Assume labor-hours required to assemble each unit are 0.5 hours per travel clock and 1.0 hour per watch, and that 80,000 travel clocks and 120,000 watches were produced Travel Clocks Watches 6. Should the company follow the controller's recommendation? Explain why