Mott Manufacturing allocates factory overhead using one cost pool with direct labor hours as the allocation base. Mott has two production departments (P1 and P2). The new accountant at Mott estimates that next year the total factory overhead costs will be \(\$ 3,000,000\) and approximately 400,000 direct labor hours will be worked. The accountant also estimates that P1 will use 100,000 direct labor hours and there will be about \(\$ 2,000,000\) in overhead costs in P1. P2 will use 300,000 direct labor hours and there will be \(\$ 1,000,000\) in overhead costs in P2. Mott has two products: A1 and B1. It takes two direct labor hours in P1 and three direct labor hours in P2 to complete one unit of A1. It takes one direct labor hour in P1 and four direct labor hours in P2 to complete one unit of B1.

Required

Which product will be undercosted and which will be overcosted with the one cost pool system? Support your answer with appropriate calculations.