Sorrentino 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 $1,020,000 in total manufacturing overhead costs in the upcoming year and will use 15,000 machine hours. Click the icon to view the additional information about the hazardous waste disposal fees.) Expected usage and costs for manufacturing overhead activities for the upcoming year are as follows: (Click the icon to view the expected usage and costs.) During the year, Job 352 is started and completed. Usage for this job follows: (Click the icon to view the usage for Job 352.) Read the requirements. Requirement 1. Calculate the cost of Job 352 using the traditional plantwide manufacturing overhead rate based on machine hours. Begin by calculating the plantwide overhead rate. First identify the formula used to compute the plantwide overhead rate, then compute the rate. (Abbreviations used: MOH = manufacturing overhead; mfg. = manufacturing) + Plantwide mfg. overhead rate = Calculate the cost of Job 352. Job Cost Record Manufacturing JOB 352 Costs Total job cost Requirement 2. Calculate the cost of Job 352 using activity-based costing. Begin by calculating the allocation rate for each activity. First determine the formula to compute the allocation rate in an activity-based costing system, then compute the rate for each activity. (Abbreviations used: est. = estimated, MH=machine hours, Mach.=Machine, Eng.=Engineering) Activity cost = allocation rate Mach, maintenance + per MH Eng. change orders + per order Waste disposal . per pound Calculate the cost of Job 352 using activity-based costing. Job Cost Record Manufacturing Costs JOB 352 Total job cost Requirement 3. If you were a manager, which cost estimate would provide you more useful information? How might you use this information? The cost estimate based on the would provide more useful information because this cost estimate takes into account This information can be used to Estimated Activity for this Year Description of Cost Pool Estimated Cost Cost Driver $ 150,000 Number of machine hours Machine maintenance costs Engineering change orders. ... Hazardous waste disposal 15,000 6,000 $ $ 360,000 Number of change orders 510,000 Pounds of hazardous materials generated 1,020,000 1,500 $ Total overhead cost 250 pounds of direct materials at $35 per pound 60 direct labor hours used at $25 per labor hour 100 machine hours used 7 change orders 40 pounds of hazardous waste generated