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 Dieeing trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Welding Packaging Using the following information, determine the overhead rates and the actual cost assigned for each of the activity cost poolsina possible ABC system for Waterways (Rounds to 2 decimal places. 12250 WATERWAYS CORPORATION Activity Cost Pools Expected Use of Cost Drivers per Activity Cost Drivers Estimated Overhead Actual Use of Drivers Irrigation Installation Labor cost $1,982,630 13.130 13.115 Machine hours 1.804,500 36,090,000 36,091,000 Machining (all machine use) Customer orders Number of orders 28,820 2,620 2.581 Shipping none (direct) NA N/A traced directly Design Cost per design 728 7 6 Selling Number of sales calls 358.400 22.400 22,620 WATERWAYS CORPORATION Activity Based Overhead Rates Activity Cost Pools Actual Cost Assigned Irrigation installation Machining all machines Whi TODOC DODAT Customer orders Design Selling Your answer is partially correct How would you classify each of the following activities by level-unit level, batch level, product level, or facility level? Batch Testing of products (If all items are tested Testing of products Ball items are not tested) U Designing new products Facility Packaging Un Molding Ratch Assembling Prod Depreciation Facility Machine maintenance LE v Advertising ty Equipment setups Electricity required to run upment Requitioner