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3. The controller of KLM Company has established the following overhead cost pools and cost drivers. Overhead Cost Pool Machine Setups Estimated Overhead Cost Cost
3. The controller of KLM Company has established the following overhead cost pools and cost drivers. Overhead Cost Pool Machine Setups Estimated Overhead Cost Cost Driver $ 100,000 Number of setups Estimated Level for Pool Rates Cost Driver 100 setups Material Handling 50,000 Weight of raw material 50,000 pounds Hazardous waste control 25,000 Weight of hazardous chemicals used 10,000 pounds Quality control inspection 37,500 Number of inspections 1,000 inspections Other overhead costs 100,000 Machine hours 20,000 MH Total $ 312,500 An order for 1,000 boxes of film development chemicals (order NX) has the following production requirements. Machine setups Raw material 4 setups 10,000 pounds Hazardous material 2,000 pounds Inspections 10 inspections 500 machine hours Machine hours Required: a. Compute the total overhead cost that should be assigned to the development-chemical order, using the five cost pools and drivers. b. What is the overhead cost per box of chemicals? c. Suppose KLM Company were to use a single, predetermined overhead rate based on machine hours. Compute the rate per hour and the total overhead assigned to the order above
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