P8.33 Traditional and activity-based product costing: manufacturer LO 8.5 2 , 8.6 [ The accountant for Snappy Photographic Supply Lid has estimated the following activity cost pools and activity drivers for the coming year: Budgeted Budgeted level for Cost per unit of Activity overhead cost Activity driver activity driver activity driver Machine setups $300 000 No. of setups 100 $3 000 per setup Material handling 150 000 Weight of raw material 50 000 kilograms $3 per kilogram Hazardous waste 75 000 Weight of hazardous 10 000 kilograms $7.50 per kilogram control chemicals used Quality control 112 500 No. of inspections 1 000 $112.50 per inspection Other overhead costs 300 000 Machine hours 20 000 $15 per machine hour Total $937 500An order for 1 000 boxes of lm development chemicals has the following production requirements: Machine setups 4 setups Raw material 10 000 kilograms Hazardous materials 2 000 kilograms Inspections 10 inspections Machine hours 500 machine hours Required: 1. Calculate the total overhead that should be assigned to the order for development chemicals. 2. What is the overhead cost per box of chemicals? 3. If Snappy Photographic Supply were to use a plantwide predetermined overhead rate based on machine hours, page 392 calculate the rate per hour. 4. Under the approach in requirement 3. how much overhead would be assigned to the order for development chemicals: {a} in total {b} per box of chemicals? 5. Explain why these two product costing systems result in such widely differing costs. Which system do you recommend? Why? 6. Calculate the unit cost of a production order for 100 specially coated plates used in lm development. In addition to direct material costing $180 per plate and direct labour costing $60 per plate. the order requires the following: Machine setups Raw material Hazardous materials Inspections Machine hours 2 setups 800 kilograms 300 kilograms 3 inspections 50 machine hours