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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Please do not give solution in image format
![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
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.
Fabric Case Leather Case
12,000
483
28
4-13 (Algo) Assigning Costs Using Traditional System, ABC System [LO 4-1, 4-3, 4-4, 4-5, 4-6]
8,000
667
52
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?
Required 1
Complete this question by entering your answers in the tabs below.
Required 2
Required 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F148c6372-dc45-40e6-813d-dd97f6d0becb%2Fe90285b4-1c28-4a49-a9d1-ed1d90d276d0%2F2imc2o_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
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.
Fabric Case Leather Case
12,000
483
28
4-13 (Algo) Assigning Costs Using Traditional System, ABC System [LO 4-1, 4-3, 4-4, 4-5, 4-6]
8,000
667
52
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?
Required 1
Complete this question by entering your answers in the tabs below.
Required 2
Required 3
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