activity-based costing will always result in zero under-or overapplied overhead. CHE PROBLEM 6-5 Computing Activity-Based Costing cost Flows (LO2-CC6, 7: L04-CC10 ,11 Munoz Corporation uses ABC to determine product costs for external financial reports. At the beginning of 2d the year, management made the following cost and activity estimatesin the company'sfive activity cost pools: Expected Estimated Activity Activity Overhead Cost Activity Cost Pool Measure s 214,200 29,750 DLHs Labour related Direct labour-hours 765 orders 55,080 Purchase orders Number of orders 1,200 tests 121,380 Product testing Number of tests 8,950 templates 321,300 Template etching Number of templates 59,500 MHs 892,500 General factory Machine-hours $1,604,460 Required: overhead rate) for each of the activity cost pools. 1. Compute the activity rate (ie., predetermined 2. During the year, actual overhead cost and activity were recorded as follows: Actual Activity Actual Overhead Cost Activity Cost Pool 30,200 DLHs 202,130 Labour related 760 orders 56,610 Purchase orders 1,105 tests 122,400 8,775 templates Product testing 316,030 57,800 MHs Template etching 911,625 General factory. $1,608,795 Total overhead cost