Puuu sely price M ul on system. d. Assuming that activity-based costing provides a more accurate estimate of cost, indicate whether PFT200 would be over or underpriced if Maduro uses direct labor hours as the allocation base. Explain how over or undercosting can affect Maduro's profitability. e. Comment on the validity of using the allocated facility-level costs in the pricing decision. Should other costs be considered in a cost-plus pricing decision? If so, which ones? What costs would you include if you were trying to decide whether to accept a special order? Exercise 5-9B Allocating costs with different cost drivers Skinner Shoes Corporation produces three brands of shoes: Brisk, Pro, and Runner Relevant informa- tion about Skinner's overhead activities, their respective costs, and their cost drivers follows: Overhead Costs Brisk Pro Runner Cost Driver Labor hours Number of setups Number of cartons Number of tests 8,000 22.000 Fringe benefits ($200,000) Setups ($120.000) Packing costs ($80,000) Quality control ($200,000) 20,000 1,200 200 1,900 MacBook Pro BOHDOT O w Document7.docx mager * Fundamental Managerial Accou* Word x m.virdocs.com/r/s/0/doc/1227543/sp/132934525/mi/4071530387cfl-%2F%2F8 Cost Management in an Automated Business Environment AE Required a. Skinner currently allocates all overhead costs based on labor hours. The company produced the following numbers of pairs of shoes during the prior year: Pro Runner Brisk 10,000 12.0002 20,000 Determine the overhead cost per pair of shoes for each brand, b. Determine the overhead cost per pair of shoes for each brand, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing system. Round your figures to two decimal points. c. Explain why the per-pair overhead costs determined in Requirements a and b differ