Urban Elite Cosmetics has used a traditional cost accounting system to apply quality control costs uniformly to all products at a rate of 14.5 percent of direct-labor cost. Monthly direct.labor cost for Satin Sheen makeup is $27.500. In an attempt to more equitably distribute quality control costs, management is considering activity based costing. The monthly data shown in the following chart have been gathered for Satin Sheen makeup Quantity of Driver Activity Cost Pool Cost Driver Pool Rates for Satin Sheen Incoming material inspection Type of material $11.58 per type 12 types In-process inspection Number of units 0.14 per unit 17,500 units Product certification Per order 77.89 per order 25 orders Required: 1. Calculate the monthly quality-control cost to be assigned to the Satin Sheen product 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 Satin Sheen product line with respect to quality control costs? By what amount? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the monthly quality control cost to be assigned to the Satin Sheen product line under the Traditional product costing system and the Activity based product costing system. (Round your final answers to nearest whole dollar.) Assigned Cost B Traditional system b Activity based costing Urban Elite Cosmetics has used a traditional cost accounting system to apply quality control costs uniformly to all products at a rate of 14.5 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $27.500 In an attempt to more equitably distribute quality control costs, management is considering activity-based costing The monthly data shown in the following chart have been gathered for Satin Sheen makeup Quantity of Oriver Activity Cost Pool Cost Driver Pool Rates for Satin Sheen Incoming material inspection Type of material $11.50 per type 12 types In-process inspection Number of units 0.14 per unit 17,500 units Product certification Per order 77.00 per order 25 orders Required: 1. Calculate the monthly quality control cost to be assigned to the Satin Sheen product 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 Satin Sheen product line with respect to quality control costs? By what amount? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Does the traditional product-costing system overcost or undercost the Satin Sheen product line with respect to quality control costs? By what amount? (Round Intermediate calculations to the nearest whole dollar) by Traditional system
