Activity Based Costing versus Traditional Costing Problem. Currently Manifestations Industries is considering changing to an Activity Based Costing System due to increased sales, increased number of products, and a more complex manufacturing process with many activities. Manifestations Industries has the following overhead costs and cost drivers. Activity Cost Pools Ordering and Receiving Machine Setup Machining Assembly Inspection Traditional Cost Pool Cost Driver Estimated Overhead Cost Driver Activity Orders $150,000 500 orders Setups $315,000 Machine hours $2,000,000 450 setups 125,000 MH Parts $1,400,000 2,000,000 parts Inspections $600,000 500 inspections Direct Labor Hours $4,465,000 1: Compute the total overhead costs assigned to Product A using activity based costing: Activity Cost Pool Product A Activity ABC Overhead Rate (Please See Tip 1 below) (a) (b) 44,650 DL Hours Total Product A Overhead (Please See Tip 2 below) (a x b) Ordering and Receiving Machine Setup Machining Assembly Inspection Sheet1 300 Orders 225 Setups 100,000 Machine hours 1,500,000 Parts 325 Inspections