Question 3-Activity Based Costing. manufactures two types of products under the brand name of Bruce" and Batman eted overhead costs of $320,000 and an estimated 20,000 hours of Wayne U company's controller, calculated a traditional overhead rate of $16 per direct labour, the direct labour hour. He also used normal costing to calculate the product unit cost for both as shown in the following summary: c Product costs per unit Bruce Direct materials Direct labour Units of Production 150,000 20,008 $10 $16 $25 75,000 The controller believes that the product unit costs are incorrect. After carefully observing ss, he has concluded that Wayne requires much more attention than ce. He has therefore initiated Activity Based Costing and created specialized activity pools, estimated the overhead costs of the activity pools, selected a cost driver for each pool, and estimated the cost driver levels for each product line, as shown in the following summary: overhead Estimated Activity Set up Assembly Inspection Total s 12,500 120,000 187,500 S 320,000 Bruce Wayne Total Cost Driver Number of setups Number of inspections Direct labour hours Machine hours (assembly) 50 200 75 300 125 500 12,500 7,500 20,000 10,000 15,000 25,000 Required: (ROUND ALL AMOUNTS TO 2 DECIMAL PLACES) on the table provided a) Calculate the total inputs used and the activity cost rate per input unit for each of the three new ABC activity pools. (3 marks) b) Using the rates Compute the total dollar value of the overhead costs that would be applied to each product line by input activity. What is the average overhead rate per unit produced for each of the two product lines? (3 marks) c) Calculate both the total and per unit amounts that would have been allocated to each product using the traditional costing method (2 marks) Compare the per unit amounts under ABC and Traditional costing for each of the two product lines Calculate and explain as to whether each is overcosted or undercosted as compared to the traditional calculation? (No marks if not indicated) (2 marks)