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 are a sample of possible cost pools for Waterways. Assembling Payroll Billing Plant supervision Digging trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Packaging Welding Instructions For each of these cost pools, what would be the likely activity cost driver? Using the fallowing information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for Waterways. How would you classify each of the following activities by level-unit level, hatch level, product level, or facility level? Testing of products Machine maintenance Designing new products Advertising Packaging Equipment setups Molding Electricity required to run equipment Assembling Requisitioning materials Depreciation The results of ABC can provide a more accurate picture of costs. Discuss the value Waterways using this system to determine overhead costs. How might using ABC affect decision making at Waterways