Smith Industries manufactures a variety of custom products. The company has traditionally used a plantwide manufacturing overhead rate based on machine hours to allocate manufacturing overhead to its products. The company estimates that it will incur $1,920,000 in total manufacturing overhead costs in the upcoming year and will use 12,000 machine hours Click the icon to view the additional information about the hazardous waste disposal fees.) Estimated Cost Estimated Activity for this Year Cost Driver $ Description of Cost Pool Machine maintenance costs Engineering change orders Hazardous waste disposal $ 360,000 Number of machine hours 240,000 Number of change orders 1,320,000 Pounds of hazardous materials generated 1.920,000 12,000 6,000 4,000 S Total overhead cost S 320 pounds of direct materials at $20 per pound 20 direct labor hours used at $45 per labor hour 80 machine hours used 11 change orders 90 pounds of hazardous waste generated i Requirements 1. 2. 3. Calculate the cost of Job 355 using the traditional plantwide manufacturing overhead rate based on machine hours. Calculate the cost of Job 355 using activity-based costing. If you were a manager, which cost estimate would provide you more useful information? How might you use this information? Print Done Clear All