Problem 3 (Textbook Reference: P44)-Activity-based costing versus traditional costing C&W Corporation manufactures travel clocks and watches. Overhead costs ae labor hours, but the controller has recommended using an activity-based costun data: are currently allocated using direct- system based on the following Activity Level ost Dmer Cost Travel Clocks Watches 30 Activity Production setup Material handling and requisition Packaging and shipping Total overhead 20 24 Setups Parts $100,000 S 30,000 60,000 e 36 80,000 120,000 Units shipped $ 190,000 Required: 4. Compute the amount of total overthead allocated to each of the products under activity-based costing: Travel Clocks Watches 5. Compute the amount of total overhead allocated to each of the products using labor-hours as the allocation base. Assume labor-hours required to assemble each unit are 0.5 hours per travel clock and 1.0 hour per watch, and that 80,000 travel clocks and 120,000 watches were produced. Travel Clocks Watches 6. Should the company follow the controller's recommendation? Explain why