1. Overhead Cost Pool Machine setups $150,000 Material handling 52,500 Quality control inspection 37,500 Other overhead costs 90,000 The controller for Mitchell Supply Company has established the following overhead cost pools and cost drivers: Budgeted Overhead Cost Number of setups Units of raw material Number of inspections Machine hours Cost Driver Total $330,000 Overhead Cost Pool Budgeted Level for Cost Driver Overhead Rate Machine setups 100 setups $1,500 per setup Material handling 50,000 units $1.05 per unit Quality control 1,000 inspections $37.50 per inspection 15,000 machine hours $6 per machine hour Other overhead Order no. 777 has the following production requirements: Machine setups Raw material Inspections Machine hours Required: 5 setups 10,000 units 12 inspections 600 machine hours A. Compute the total overhead that should be assigned to order no. 777 by using activity-based costing (2 marks) B. Suppose that Mitchell were to use a single, predetermined overhead rate based on machine hours. Compute the rate per hour and the total overhead assigned to order no (2 marks) C. Discuss the merits of an activity-based costing system in comparison with a traditional costing system (2 marks)