Rainbow Spray Paints, Inc. has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate of 15 percent of direct-labor cost. Monthly direct-labor cost for the enamel paint line is $102,000. In an attempt to more equitably distribute quality-control costs, Rainbow is considering activity-based costing. The monthly data shown in the following chart have been gathered for the enamel paint line.

Activity Cost Pool	Cost Driver	Pool Rates			Quantity of Driver for Enamel Paint
Incoming material inspection	Type of material	$	27.00	per type		27	types
In-process inspection	Number of units		0.29	per unit		37,000	units
Product certification	Per order		154.00	per order		45	orders

Required:

1.	Calculate the monthly quality-control cost to be assigned to the enamel paint line under each of the following product-costing systems.

a.	Traditional system which assigns overhead on the basis of direct-labor cost.
b.	Activity-based costing.

2.	Does the traditional product-costing system overcost or undercost the enamel paint line with respect to quality-control costs? By what amount?