Vision Inc. uses a traditional cost accounting system to apply quality-control costs uniformly to all its products at a rate of 40% of the direct labor cost. The monthly direct labor cost for the varnish paint line is $120,000. The company is considering activity-based costing to apply-quality-control costs. The monthly data for the varnish paint line have been gathered as follows:

Activity Cost Pools	Cost Drivers	Estimated Use of Cost Drivers per Activity	Units rates
Incoming material inspection	Type of materials	200 types	$35.00
In-process inspection	Number of units	45,000 units	$0.30
Product certification	Per order	100 orders	$140.00

1. Using the traditional costing, how much was Vision's overhead cost? *

2. Using activity-based costing, how much was Vision's overhead cost? *

3. Comparing your answers in Q1 and Q2, the overhead cost under the traditional costing is *

• lower than the overhead cost under activity-based costing

• equal to the overhead cost under activity-based costing

• higher than the overhead cost under activity-based costing

4. Using activity-based costing, how much was Vision's total conversion cost? *