Stelco Inc. is a privately owned company specializing in the making of specialized disposable gloves for the health care industry. The company adopts a normal job order costing system., In order to ensure they have accurate costs for the product, Stelco decided to implement activity-based costing to assign manufacturing overhead to jobs. Stelco identified four activities machining, engineering, assembling, and inspecting under an activity-based costing system. Under the old traditional volume-based costing system, overhead is assigned to different jobs using machine hours. ActivityCostsDriverAmount of DriverMachining$560,000Machine hours4,000Engineering240,000Engineering hours8,000Assembling units390,000Assembly labor hours12,000Inspecting products150,000Inspection hours3,000The following are the jobs Stelco worked on in October. Hospital WDentistry XDoctor YMed Lab ZBalance, Oct1 $45,600$37,200$ 0$ 0Octoberactivity:Direct materials$79,400$94,100$43,200$84,500Direct labour$65,000$53,700$31,800$62,300Machine hours3050100170Engineering hours1409070300Assembly labour hours200320280250Inspecting hours80601020On average, 80% of the Work in Process inventories on October 1 are prime costs. The actual activity costs for machining, engineering, assembling and inspecting for October were $47,400, $20,000, $32,800, and $12,500, respectively. By October 31, Job Doctor Y is the only job in progress while Jobs Hospital W and Dentistry X were completed and sold for 200 percent of prime costs. Required:

1.Determine the cost of Job Hospital W completed under the old traditional volume-based costing system and the newly implemented activity-based costing system. Briefly comment on any difference in the cost of Job Hospital W.

2.Using the traditional costing, determine the costs of Work In Process on October 31.

3.Using the traditional costing, determine the gross profits on Job Dentistry X.

4.Using activity-based costing, determine any under- or over-allocated overhead for the month ended October 31. Briefly comment on the causes of the under- or over-allocated overhead and how they should be accounted for.