ADA Pharmaceutical Company produces three drugs Diomycin, Homycin, and Addolin-belonging to the analgesic (pain-killer) family of medication. Since its inception four years ago, ADA has used a direct labor hour-based system to assign manufacturing overhead costs to products Eme Weissman, the president of ADA Pharmaceutical, has just read about activity-based costing in a trade journal. With some curiosity and interest, she asked her financial controller, Takedo Simon, to examine differences in product costs between the firm's current costing and activity-based costing systems. ADA has the following budget information for the year Diomyci $201,000 246,000 7,16e230,009254,099 1,960 HomycinAddolin 259,000 296,800 $261,000 Cost of direct materials Cost of direct labor Number of direct labor hours Number of capsules 6,760 496,000 966,000 ADA has identified the following activities and cost drivers and has assigned them a total overhead cos of $198,000. Budgeted Budgeted Overhead Cost Driver Cost Driven Setup hours Number of Morkens Direct labor hours Inspection houns cstomens served Volume 1,560 1,160 15,600 1,030 625 Cost Activity Machine setup Plant management Supervision of direct labor Quality inspection Order expediting s 15,600 35, 600 45,600 50,e00 51,200 ADA Pharmaceutical Company produces three drugs Diomycin, Homycin, and Addolin-belonging to the analgesic (pain-killer) family of medication. Since its inception four years ago, ADA has used a direct labor hour-based system to assign manufacturing overhead costs to products Eme Weissman, the president of ADA Pharmaceutical, has just read about activity-based costing in a trade journal. With some curiosity and interest, she asked her financial controller, Takedo Simon, to examine differences in product costs between the firm's current costing and activity-based costing systems. ADA has the following budget information for the year Diomyci $201,000 246,000 7,16e230,009254,099 1,960 HomycinAddolin 259,000 296,800 $261,000 Cost of direct materials Cost of direct labor Number of direct labor hours Number of capsules 6,760 496,000 966,000 ADA has identified the following activities and cost drivers and has assigned them a total overhead cos of $198,000. Budgeted Budgeted Overhead Cost Driver Cost Driven Setup hours Number of Morkens Direct labor hours Inspection houns cstomens served Volume 1,560 1,160 15,600 1,030 625 Cost Activity Machine setup Plant management Supervision of direct labor Quality inspection Order expediting s 15,600 35, 600 45,600 50,e00 51,200