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Required information Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the
Required information Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case Leather Case 15,000 10,000 551 899 56 84 Total estimated overhead costs are $223,250, of which $181,250 is assigned to the materials handling cost pool and $42,000 is assigned to the setup cost pool. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the leather case line using the traditional costing system based on direct labor hours. (DO not round intermediate calculations and round your final answer to the nearest whole dollar amount.) Overhead Assigned Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the leather case line using ABC. (Round activity rates or activity proportions and intermediate calculations to four decimal places. Round your final answer to 2 decimal places.) Overhead Assigned Required 1 Required 2 Required 3 Was the leather case over- or undercosted by the traditional cost system compared to ABC? Leather Case
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