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Saved Help Save & Exit Submit Check my work Requirea information E4-12 and E4-13 Bunker...

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Saved Help Save & Exit Submit Check my work Requirea information E4-12 and E4-13 Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow Fabric Case Leather Case Number of labor hours 16,000 9,000 Number of material moves 546 Number of setups 52 78 894 Total estimated overhead costs are $214,000, of which $175.000 is assigned to the materials handling cost pool and $39.000 is assigned to the setup cost pool E4-12 (Algo) Assigning Costs Using Traditional System, ABC System [LO 4-1,4-3, 4-4,4-5, 4-6) Required: 1. Calculate the overhead assigned to the fabric case using the traditional casting system based on direct labor hours. 2. Calculate the overhead assigned to the fabric case using ABC 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC?

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