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 (b) Using the following information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for Waterways. (Round answers to 2 decimal places, e.g. 12.25.) WATERWAYS CORPORATION Activity Cost Pools Irrigation installation Machining (all machine ise) Cost Drivers Labor cost Machine hours Estimated Overhead $2,222,550 1 514 050 Expected Use of Cast Drivers per Activity 13,470 30 281 onn Actual Use of Drivers 13,448 30 287 nnn Estimated Overhead Actual Use of Drivers Cost Drivers Labor cost Activity Cost Pools Irrigation installation Machining (all machine use) Customer orders Shipping Design Selling Machine hours Use of Cost Drivers per Activity 13,470 30,281,000 2,690 N/A $2,222,550 1,514,050 34,970 N/A 13,448 30,282,000 2,657 traced directly Number of orders none (direct) Cost per design Number of sales calls 882 9 8 318,000 21,200 21,390 WATERWAYS CORPORATION Activity- Based Activity Cost Overhead Pools Rates Actual Cost Assigned Irrigation installation Machining (all machine use) Customer orders Design Selling