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The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Budgeted Budgeted Overhead Level for Cost Activity Cost
The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Budgeted Budgeted Overhead Level for Cost Activity Cost Pool Cost Cost Driver Driver Pool Rate Machine setups $ 330, 090 Number of setups 110 $3, 000 per setup Material handling 90, 090 Weight of raw material 30, 090 1b. 3 per pound Hazardous waste control 70, 090 Weight of hazardous chemicals used 7,090 1b. 10 per pound b4 ta ta ta Quality control 150, 090 Number of inspections 2, 090 75 per inspection Other overhead costs 400, 090 Machine hours 20, 090 20 per machine hour Total $1, 040, 090 An order for 5,000 boxes of medical-testing agent has the following production requirements. Machine setups 7 setups Raw material 12, 000 pounds Hazardous materials 4, 000 pounds Inspections 10 inspections Machine hours 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? a. In total. b. Per box of testing agent
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