Waterways Problem 04 b-c (Part Level Submission) Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of costing because of the variety of items it produces and the many different activities in which it is involved. The activities listed below area sample of possible cost pools for Waterways. Assembling Payroll Billing Plant supervision Digging trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Welding Packaging (h) Using the following information, cetermine the overhead cates and the actual cost assigned for each of the activity cost pools in a poraba ABC system for Waterways, (Round answers to 2 decimal places, eg. 12.25.) WATERWAYS CORPORATION Expected Use of Cost Activity Cost Estimated Delvere per Actual Use of Pools Cost Drivers Overhead Activity Drivers Irrigation installation Labor cost $2,057,850 13.431 Machining Coll machine se) Machine hours 1,721,200 34,464,000 34465,000 Customer anders Number of orders 30,970 2.000 2.6659 Shipping hone direct) NA NA traced direct Design Cost per design 2 Seling Number of sales als 295.400 21.100 21,280 WATERWAYS CORPORATION Activity Based Actual Activity Cout Overhead Cost Poole Assigned notion Machining maine Customers Design Seting TUT