Question 4 Brown Manufacturing has four categories of overhead.The four categories and expected overhead costs for each categoryfor next year are listed below: N$ Maintenance 200 000 Materialshandling 32 000 Setups 100 000 Inspection 120 000 Currently,overhead is applied using a predetermined overhead rate based uponbudgeted direct labour hours. For next year, 50 000 direct labourhours are budgeted. The company has accepted a new job and thesales manager wanted to have a cost estimate. The productiondepartment provided the following information for the new job:Direct materials N$6 000 Direct labour (1 000 hours) N$10 000Machine hours 500 Number of material moves 12 Number of setups 2Number of inspections 10 In the past, full manufacturing cost hasbeen calculated by allocating overhead using a volume-based costdriver (direct labour hours). With the information supplied by theproduction department, the bookkeeper requested you to assist themwith the introduction of an activity based costing system. Youcollected the following expected activity for the four activitybased cost drivers: Machine hours 20 000 Material moves 1 600Setups 2 500 Quality inspections 4 000 Required: 4.1 Determine theamount of overhead that would be allocated to the proposed job if aplant wide rate with direct labours is used. 4 4.2 Determine thetotal cost of the proposed job. 3 4.3 Determine the amount ofoverhead that would be applied to the proposed project if activitybased drivers are used. 4 4.4 Determine the total cost of theproposed job if activity based costing is used. 7