Yarn Company produces two different yarn products, Cotton Yarn (Product A) and Wool Yarn (Product B). Yarn Company uses a traditional volume-based costing system in which direct labor hours are the allocation base. Yarn Company is considering switching to an ABC system by splitting its manufacturing overhead cost of $450,000 across three activities: Setup, Production, and Finishing. Under the traditional volume-based costing system, the predetermined overhead rate is $4.50/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are as follows: Usage by Usage by Cotton Yarn Wool Yarn Activity Rate (Product A) (Product B) Setup (Batches) Production (Direct Labor Bours) $ 100/hour $3.00 170 330 41,000 59,000 $ 580 24 120 Finishing (Machine Hours) Required: a. Calculate the indirect manufacturing costs assigned to Cotton Yarn under the traditional costing system. Indirect Manufacturing Costs b. Calculate the Indirect manufacturing costs assigned to Wool Yarn under the traditional costing system. Indirect Manufacturing Costs