Superior Company currently uses a traditional costing system to assign overhead costs uniformly to all jobs at a rate of 20% of direct labor costs. The President has suggested adopting activity-based costing. Total estimated overhead allocated to the assembling cost pool is $3,500, estimated overhead allocated to the machining pool is $5,850, and estimated overhead allocated to the inspecting cost pool is $4,200. Data related to the production of picnic tables is below.

Activity Cost Pools	Cost Drivers	Expected Use of Cost Drivers per Activity	ABC Overhead Rate
Assembling	Number of boards	?	$0.35
Machining	Number of machine hours	?	$13.00
Inspecting	Number of inspections	?	$7.00

1) Compute the expected use of each cost driver for each activity.

2) Compute the total cost of job A492 which has $300 of direct materials cost, $280 of direct labor cost, 50 boards, 10 machine hours, and 1 inspection, using (a) the activity-based costing system AND (b) the traditional costing system.

3) By what amount does the traditional product costing system undercast or overcast the picnic table production line?

4) Classify each of the activities as value-added or non-value-added.