The job costing system at Sheri’s Custom Framing has five indirect-cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs: Job 215, an order of 15 intricate personalized frames, and Job 325, an order of 6 standard personalized frames. The controller wants you to compare overhead allocated under the current simple job-costing system and a newly designed activity-based job-costing system. Total budgeted costs in each indirect-cost pool and the budgeted quantity of activity driver are as follows:

	Budgeted Overhead	Activity Driver	Budgeted Quantity of Activity Driver
Purchasing	$45,000	Purchase orders processed	2,500
Material handling	58,750	Material moves	4,500
Machine maintenance	125,650	Machine-hours	11,000
Product inspection	10,000	Inspections	1,500
Packaging	22,350	Units produced	3,900
	$261,750

Information related to Job 215 and Job 325 follows. Job 215 incurs more batch-level costs because it uses more types of materials that need to be purchased, moved, and inspected relative to Job 325.

	Job 215	Job 325
Number of purchase orders	28	9
Number of material moves	12	5
Machine-hours	45	70
Number of inspections	10	5
Units produced	16	8

Direct material and direct Labors of the two Jobs are similar at $ 10,000 & 8,000 respectively.

Required:

1.         Compute the total overhead allocated to each job under a simple costing system, where overhead is allocated based on machine-hours.

2.         Compute the total overhead allocated to each job under an activity-based costing system using the appropriate activity drivers.

3.         Compute the total cost of each job using the ABC system.

4.         Do activity-based costing systems always provide more accurate product costs than conventional cost systems? Why or why not?