International Steel Company has budgeted manufacturing overhead costs of $1,940,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: Activity Centre Material handling Cost Driver Number of moves Estimated Overhead Estimated Activity $264,000 44,000 moves Purchase orders Number of orders $112,000 1,600 orders Product testing Number of tests $429,000 3,900 tests Machine set-up Number of set-ups $325,000 5,000 set-ups Machining Machine hours $810,000 100,000 machine Each unit of the products requires the following: Soft Steel Hard Steel Direct materials costs $300 $200 Direct labour costs $120 $60 Purchase orders 2 3 Machine set-up 5 10 Product testing 3 Machining 50 50 40 Material handling 4 6