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Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate of 18 percent of

image text in transcribedimage text in transcribedimage text in transcribed Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate of 18 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $105,000. 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. Activity Cost Pool Incoming material inspection In-process inspection Product certification Cost Driver Type of material Number of units Per order Pool Rates $ 18.00 per type 0.32 per unit 141.00 per order Quantity of Driver for Satin Sheen 20 types 40,000 units 60 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? 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. Assigned Cost a. Traditional system b. Activity-based costing Does the traditional product-costing system overcost or undercost the Satin Sheen product line with respect to quality-control costs? By what amount? Traditional system by

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