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 Billing Plant supervision Digging trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Welding Packaging wong the following intomation, determine the overhead rates and the actual cont wigned for each of the activity cost pools in a possible ABC system for Waterways (Round answers to 3 ) WATERWAYS CORPORATION Expected Activity Cout Use of Cost Estimated Drivers per Actual Use of Pools Cost Drivers Overhead Activity Drivers Imigation installation Labor cost $2,094,660 12,930 12,900 Machining (all machinese) Machine hours 1.550,750 31.015.000 11,016,000 Customer orders Number of orders 34,710 2,670 2,638 Shipping none (direct) NA NA traced directly Design Cost per design 73 Selling Number of sales calls 364,200 22,600 22,820 WATERWAYS CORPORATION Activity Based Actual Activity Cost Overhead Cost Pools Rates Assigned Irrigation installation Machining (of machine) Customer order Design Seting How would you classify each of the following activities by level-unit level, batch level, product level, or facility level? Testing of products of 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 Electricity required to run equipment Requisitioning materials