CALCULATOR PCENTES VERSION BACK Waterways Problem 04 b c 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 the 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 Billing Plant supervision Dlaging trenches Product design Janitorial Purchasing materials Machine maintenance Sating Machine setups Testo Molding Welding Packaging Using the following information determine the overhead rates and the actor at the cost olis po ABC item for war com answers to decimal places. 12.25.) WATERWAYS CORPORATION Expected use of cost Activity cost Estimated Drivers per Achsal Use of Pools Cost Drivers Overhead Activity Drivers Labor cott 31.871. 12.750 Machining machine 1.600.250 32.005.000 12000.00 esting of products (if all items are not tested) esigning new products > ackaging Testing of products (if all items are tested) Testing of products (if all items are not tested) Designing new products