Required information

E$4-12$ and E$4-13$

Bunker makes two types of briefcase, 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 cost pools: materials handling and setup. Pertinent data follow:

Total estimated overhead costs are $$143,400,$ of which $$120,000$ is assigned to the materials handling cost pool and

$$23,400$ is assigned to the setup cost pool.

E$4-12($Algo$)$ Assigning Costs Using Traditional System, ABC System $[$LO $4-1,4-3,4-4,4-5,4-6]$

Required:

Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours.

Calculate the overhead assigned to the fabric case using ABC.

Was the fabric case over$-$ or undercosted by the traditional cost system compared to ABC?

Complete this question by entering your answers in the tabs below.

Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours.

Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.