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 Estimated volume of allocation base Budgeted Allocation manufacturing base overhead costs $6,000,000 #inspections $5,000,000 # moves $3,000,000 #set-ups 125 inspections 800 moves Inspections Material handling Set-ups Product testing 30 set up $3,000,000 #tests 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) Using activity based costing compute the manufacturing overhead costs that will be allocated to Job # 510 Mars. (4 marks)