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Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of costing because of the variety of items it produces and the many different activities in which it is involved. The activities listed below area sample of possible cost pools for Waterways Assembling Payroll Plant supervision Billing Digging trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Welding Packaging U to Tollowing information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for Waterways. (Round answers to 2 decimal places, e.g. 12.25.) WATERWAYS CORPORATION Expected Use of Cost Drivers per Activity Estimated Overhead $2,094.400 Activity Cost Pools Irrigation installation Machining (all machine use) Customer orders Actual Use of Drivers 12,320 12,304 1,560,100 31,202,000 31.203,000 Cost Drivers Labor cost Machine hours Number of orders none (direct) Cost per design 33.480 2.790 2.759 Shipping N/A N/A traced directly Design 752 8 7 Selling Number of sales calls 306,000 20,400 20,620 WATERWAYS CORPORATION Activity Cost Pools Activity Based Overhead Rates Actual Cost Assigned Irrigation installation $ $ Machining (all machine use) Customer orders Design Selling eTextbook and Media WATERWAYS CORPORATION Activity Cost Pools Activity Based Overhead Rates Actual Cost Assigned Irrigation installation $ $ Machining (all machine use) Customer orders Design Selling eTextbook and Media How would you classify each of the following activities by level-unit level, batch level, product level, or facility level? Testing of products (if all items are tested) Testing of products (if all items are not tested) Designing new products Packaging Molding Assembling Depreciation Machine maintenance Advertising Equipment setups - Molding > Assembling > Depreciation C Machine maintenance Advertising Equipment setups Electricity required to run equipment Requisitioning materials