Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor- hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Recommended Cost Driver Estimated Cost Driver Activity Estimated Cost 38,500 187,000 250,000 198,000 44,450 144,000 $861,950 Processing orders Setting up production Handling materials Machine depreciation and maintenance Performing quality control Packing Total estimated cost Number of orders Number of production runs Pounds of materials used Machine-hours Number of inspections Number of units 175 orders 110 runs 100,000 pounds 11,000 hours 35 inspections 480,000 units In addition, management estimated 7,800 direct labor-hours for year 2. Assume that the following cost driver volumes occurred in January, year 2 Institutional 64,000 $35,000 Sta ndard Number of units produced Direct materials costs Direct labor-hours Number of orders Number of production runs Pounds of material Machine-hours Number of inspections Units shipped 28,000 $22,000 410 9 3 6,000 130 10,000 $15,000 630 400 15,000 560 3,300 64,000 28,000 10,000 Actual labor costs were $15 per hour