MOON Inc. manufactures drones. The company currently uses a plantwide overhead rate traditional method) based on direct labour hours to allocate manufacturing overhead to individual jobs. It estimates to incur 500,000 direct labour hours this year and $17,000,000 in manufacturing overhead. However, the owner and CEO is considering using activity-based costing to allocate manufacturing overhead. She has identified four activities that incur or drive manufacturing costs: inspections, material handling, set ups and product testing. The budgeted activity costs for the upcoming year and the allocation bases are as follows: Activity Budgeted manufacturing overhead Allocation Estimated volume base of allocation base costs Inspections 125 inspections $6,000,000 # inspections $5,000,000 #moves 800 moves Material handling Set-ups 30 set ups $3,000,000 # set-ups $3,000,000 # tests Product testing 20 tests Job #007 Apollo - used 7 inspections, 50 moves, 5 set ups, 3 tests and 100,000 direct labour hours Job # 510 Mars - used 9 inspections, 35 moves, 2 set ups , 5 tests and 150,000 direct labour hours. Required: 1. Using the traditional method of cost allocation determine the manufacturing overhead that will be allocated to Job #007 and Job # 510 Mars. (6 marks) 2. Using activity based costing compute the activity rate for each activity. (4 marks) 3. Using activity based costing compute the manufacturing overhead costs that will be allocated to Job #007 Apollo. (4 marks) 4. Using activity based costing compute the manufacturing overhead costs that will be allocated to Job # 510 Mars. (4 marks)