Vaughn Toys & Games, Inc. manufactures specialty toys. Vaughn uses a traditional product costing system to assign overhead costs uniformly to all products. To meet industry safety standards and to assure its customers of safe and durable toys, Vaughn assigns its qualitycontrol overhead costs to all products at a rate of of direct labor costs. Its direct labor cost for the month of August for its toddler line of toys is $ In response to repeated requests from its financial vice president, Vaughn's management agrees to adopt activitybased costing. Data relating to the toddler line of toys for the month of August are as follows:
tableActivity Cost Pools,Cost Drivers,tableOverheadRatetableNumber of CostDrivers Usedper ActivityMaterials Inspection,Number of pounds,$ per pound, poundsAssembly Line Inspection,Number of finished toys,$ per toy, toysNational Toy Association Certification,Retail orders,$ per order, orders
a
Compute the qualitycontrol overhead cost to be assigned to the toddler toy line for the month of August using the traditional product costing system direct labor is the cost driver and using activitybased costing.
QualityControl Overhead Cost
Traditional costing
$
Activitybased costing
$