Question
The controller for Tomball Co. established the following overhead cost pools and cost drivers: Budgeted Estimated Overhead Cost Pool Overhead Cost Driver Cost Driver Level
The controller for Tomball Co. established the following overhead cost pools and cost drivers:
| Budgeted | Estimated |
| Overhead Cost Pool | Overhead | Cost Driver | Cost Driver Level |
| Quality controls | $650,000 | # of inspections | 3,250 | inspections |
| Machine setups | $360,000 | # of setups | 6,000 | setups |
| Other overhead costs | $290,000 | # of machine hours | 14,500 | machine hours |
| A recent order for sailboats used:
|
Required: Please answer all the following questions, and show your works and computations to get full credits.
What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system?
Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
Utilizing ABC, how much total overhead is assigned to the order?
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