Washie manufactures two types of products for washing vehicles: the washing mitt, and the polishing cloth. Up to this point, Washie has been utilizing traditional costing with one plant-wide overhead rate using machine hours as the allocation base. The company has been receiving complaints that the polishing mitt seems over-priced. Management is wondering if there's merit to this claim since the washing mitt is a more complex product compared to the polishing cloth. As such, management has gathered information on the potential activity areas to be used. Activity Activity Measure Estimated Manufacturing Overhead Cost Design Design hours $12,000 Setups Number of set-ups 40,000 Materials Handling Meters of fabric 30,000 Production Machine Hours 250,000 The company expected has determined the expected activity for each of the product lines: During the year, the company sold 100,000 washing mitts and 50,000 polishing cloths. Direct costs are $8.00 for washing mitts and $2.00 for polishing costs. Activity Mascara Wachinn Mitt Dalichina Cloth