QUESTION 2 ABC problem Company LSD LTD has 4 types of overhead . The four categories and expected costs for each category for next year are listed below Inspection cost $90,000 Material Handling cost $ 82,000 Actual overhead Cost 530,000 Estimates for the proposed job [Job #23] are as follows m _ ii of inspections Units produced The company has been asked to submit a bid for a proposed job. The plant manager thinks getting this job would result in new business in future years. Usually bids are based upon full manufacturing cost plus 30%. In the past , full manufacturing cost has been calculated by allocating overhead using volume based cost driver [[DLH]. The plant manager has heard of a new way of applying overhead that uses cost pools and cost drivers. Expected activity for the four activity based cost drivers that would be used are : Cost Drivers Machine Hours Material Moves Quality Inspections Part 2 1 Calculate the WV ' ' V \" ' ' m using the activity based costing. Determine the amount of overhead that would be applied to the proposed project if activity based drivers are used Determine the total cost ofthe proposed job using ABC. Calculate the _ - _ is the company going to use according to its policy? Has the company overapplied or underapplied using FBC and ABC? How did you come to this conclusion