1.Use the 7-Step Cost Assignment Process to calculate total manufacturing costs under:

a.Traditional (volume-based) costing system

b.Activity-Based costing system (start with Step 3)

c.What are the primary differences between the two methods?In this instance,which methods do you think more fairly allocates overhead costs? Explain. (minimum 2-3 sentences)

Crazy Skates manufactures and sells three types of skates: Basic Roller, Beginner Inline, and Professional Inline.Based on budgetary projections, the information listed below is available:

Basic Beg. Inline Pro Inline Projected sales in units 200 350 150 PER UNIT DATA: Selling price $20.00 $35.00 $50.00 Direct materials $2.50 $4.00 $7.50 Direct labor $1.80 $4.20 $9.00 Direct labor hours 0.15 0.35 0.75 Machine hours 1.20 2.00 2.20 Inspections 4 7 5 Total overhead costs and activity levels for the year are estimated as follows: Activity Overhead costs Activity levels Direct labor 265 labor hours Machine hours $6,800.00 1,270 mach hours Inspections $3,400.00 16 inspections $10,200.00