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Setup costs for Weird Als two different accordion products: The Polka, and The Super amounted...

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Accounting

Setup costs for Weird Als two different accordion products: The Polka, and The Super amounted to $60,000. Each product has the same number of set-ups. Weird Al used 8,000 labor hours to produce The Polka, and 16,000 labor hours to produce The Super. Weird Al currently applies all overhead based on direct labors hours. However, after taking BUAD 2050 Weird Al is considering switching to activity based costing. Comparing the traditional costing system that is based on direct labor hours, to activity-based costing, what is the impact?

The Polka is _____________________(indicate under or over-costed) by $__________ under traditional costing.

The Super is _____________________(indicate under or over-costed) by $__________ under traditional costing.

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