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Machine setups $ 500,000 Number of setups The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.
Machine setups $ 500,000 Number of setups The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Activity Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Pool Rate $4,000 per setup Cost Driver 125 Material handling 70,000 weight of raw material 35,000 16. $ 2 per pound Hazardous waste control Quality control Other overhead costs 50,000 75,000 500,000 Weight of hazardous chemicals used Number of inspections 5,000 lb. $ 10 per pound 1,000 $ 75 per inspection Machine hours 25,000 $ 20 per machine hour Total $1,195,000 An order for 1,000 boxes of medical-testing agent has the following production requirements. Machine setups Raw material Hazardous materials Inspections Machine hours 5 setups 10,000 pounds 2,000 pounds 10 inspections 500 machine hours: Required: 1. Compute the total overhead that should be assigned to the medical-testing agent order. 2. What is the overhead cost per box of testing agent? 3. Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour. 4. Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order? Drea Novt
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