Sandhill Inc. manufactures and distributes three types of water skis: beginner, intermediate, and advanced. Production is highly automated for the beginner model, whereas the intermediate and advanced models require increasing degrees of labour, depending on the shaping and finishing processes. Sandhill applies all indirect costs to production using a single predetermined overhead (OH) rate based on direct labour hours (DLH). Management estimates that 27,600 DLH will be used in the upcoming year, at a rate of $19 per hour. Assume that the following activity took place in the first month of the new year: Beginner Intermediate Advanced Number of units produced 18,400 7,400 2,800 Direct materials costs $19,100 $12,000 $7,400 Direct labour hours 500 900 1,800 Number of orders 6 3 Number of production runs 2 20 3 Kilograms of material used 7,400 2,900 1,400 Machine hours 1,100 280 180 Number of inspections 3 3 3 Number of units shipped 16,600 6,900 2,300 A consultant recently suggested that Sandhill switch to an activity-based costing system, and assembled the following information: Activities Order processing Recommended Cost Drivers Estimated OH Cost Cost Drivers Number of orders $ 55,000 100 orders Material handling Kilograms of materials used 550.000 110,000 kilograms Machine depreciation and maintenance Machine hours 378.000 18,000 hours Quality control Number of inspections 121,000 40 inspections 1,104.000