Activity-Based Costing, Lean Operations, and the Costs of Quality 225 E4-24A Compare traditional and ABC allocations on a job (Learning Objective 2) Radley Products has adopted an ABC costing system. The following manufacturing activi- ties, indirect manufacturing costs, and cost drivers have been identified: Total estimated MOH Activity Total estimated amount of costs related to activity allocation base activity Machine setup $ 120,000 2,000 setups Machining $1,050,000 6,000 machine hours Polishing $ 80,000 10,000 polishing cloths Quality control $ 280,000 4,000 tests run Facility-level costs $ 120.000 50,000 DL hours Total manufacturing overhead (MOH) $1.650,000 The Job Cost Record for Job #624 revealed that direct materials requisitioned for the job totaled $1,050. The Job Cost Record also showed that direct labor for this job totaled 10 hours at a wage rate of $25 per hour. Other data collected on the resources used by Job #624 included: 1 machine setup required 5 machine hours 2 polishing cloths 2 quality control tests run Requirements 1. Calculate the activity cost allocation rate for each of the five pools listed in the table. 2. Calculate the total cost of Job #624 (use an ABC costing system). 3. Why would ABC provide a more accurate allocation of manufacturing overhead (MOH) than a plantwide rate? 4. Assume that Radley Products used a traditional costing system rather than an ABC sys- tem. Its plantwide MOH rate would have been determined using direct labor (DL) hours as the allocation base. How much cost distortion would have occurred on this job