The accountant for Halifax Photographic Supply Ltd has estimated the following activity cost pools and activity drivers for the coming year:

Activity

Budgeted overhead cost

Activity driver

Budgeted level for activity driver

Machine setups Material handling

Hazardous waste control

Quality control

Other overhead costs

Total

$200,000 No. of setups

100,000 Weight of raw materials

50,000 Weight of hazardous chemicals used

75,000 No. of inspection 200,000 Machine hours

$625,000

100

50000 Kilograms 10000 Kilograms

1000 20000

An order for 1000 boxes of film development chemicals has the following production requirements:

Activity

Machine setups

Material handling Hazardous waste control Quality control

Other overhead costs

Required:

Level of activity driver 4 setups

10 000 kg

2000 kg

10 inspections 500 machine hrs

1. Calculate cost per unit of activity driver ( 2 Marks)

2. Calculate the total overhead that should be assigned to the order for development

chemicals. ( 3 Marks)

3. What is the overhead cost per box of chemicals? ( 2 Marks)

4. Calculate the unit cost of a production order for 100 specially coated plates used in

film development. In addition to direct material costing $120 per plate and direct labour costing $40 per plate, the order requires the following: ( 3 Marks)

Activity

Machine setups

Material handling Hazardous waste control Quality control

Other overhead costs

Level of activity driver 2 setups

800 kg

300 kg

3 inspections

50 machine hours