Required information E4-12 and E4-13 Bunker makes two types of briefcases, 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 pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case Leather Case 12,000. 8,000 483 28 667 52 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. 4-13 (Algo) Assigning Costs Using Traditional System, ABC System [LO 4-1, 4-3, 4-4, 4-5, 4-6] equired: . Calculate the overhead assigned to the leather case line using the traditional costing system based on labor hours. . Calculate the overhead assigned to the leather case line using ABC. Was the leather case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyz…