International Steel Company has budgeted manufacturing overhead costs of $1,995,000. It has allocated overhead on a plantwide basis to its two products [soft steel and hard steel) using machine hours, which are esmated to be 100,000 for the current year. The company has decided to experiment with activitybased costing and has created ve acb'vity cost pools and related activity cost drivers as follows: Material handling Number of moves $301,000 43,000 moves Purchase orders Number of orders $105,000 1,400 orders Product testing Number of tests $444,000 3,700 tets Machine setup Number of setups $335,000 5,000 setups Machining Machine hours $810,000 100,000 machine hours Each unit of the products requires the following: Direct mateals costs $300 $200 Direct labour costs $120 $60 Purchase orders 2 3 Machine setup 5 10 Product tailing 3 4 Machining 40 40 Material handling 4 6