Texas Co. established the following overhead cost pools and cost drivers:

Budgeted

Estimated

Overhead Cost Pool

Overhead

Cost Driver

Cost Driver Level

Quality controls

$780,000

# of inspections

26,000

inspections

Machine setups

$720,000

# of setups

12,000

setups

Other overhead costs

$900,000

# of machine hrs

50,000

machine hrs

Total overhead costs

$2,400,000

A recent order for sailboats used:

Quality inspections

750

inspections

Machine setups

500

setups

Machine hours (MHs)

2,400

machine hours

Required:

a. What is the overhead rate per machine hour if the number of machine hours (MHs) is used as a single cost driver under traditional costing system?

b. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?