The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Budgeted Overhead Activity Cost Pool Cost Cost Driver Budgeted Level for Cost Driver Pool Rate Machine setups $250,000 Number of setups 125 $2,000 per setup Material handling 75,000 Weight of raw material 37,500 lb. $2 per pound Hazardous waste Weight of hazardous control 25,000 Quality control 75,000 chemicals used Number of inspections 5,000 lb. $5 per pound 1,000 $75 per inspection Other overhead costs...... 200,000 Machine hours 20,000 $10 per machine hour Total $625,000 An order for 1,000 boxes of medical-testing agent has the following production requirements. Machine setups 5 setups Raw material Hazardous materials Inspections Machine hours 10,000 pounds 2,000 pounds 10 inspections 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. 5. Explain why these two product-costing systems result in such widely differing costs. Which sys- tem do you recommend? Why? 6. Build a spreadsheet: Construct an Excel spreadsheet to solve requirements (1), (2), (3), and (4) above. Show how the solution will change if the following data change. The overhead associated with machine setups is $375,000, and there are 500 inspections budgeted.