Question
The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Activity Cost PoolBudgeted Overhead CostCost Driver Budgeted Level
The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.
Activity Cost PoolBudgeted Overhead CostCost Driver Budgeted Level for Cost DriverPool Rate Machine setups$300,000 Number of setups 100 $3,000per setup Material handling 90,000 Weight of raw material 30,000lb. $3per pound Hazardous waste control 60,000 Weight of hazardous chemicals used 6,000lb. $10per pound Quality control 225,000 Number of inspections 3,000 $75per inspection Other overhead costs 400,000 Machine hours 20,000 $20per machine hour Total$1,075,000An order for 5,000 boxes of medical-testing agent has the following production requirements.
Machine setups7setupsRaw material10,000poundsHazardous materials2,000poundsInspections10inspectionsMachine hours700machine hoursRequired: 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.
Compute the total overhead that should be assigned to the medical-testing agent order. What is the overhead cost per box of testing agent? (Round "Overhead cost" to 2 decimal places
Total Overhead -
Overhead Cost - per box
Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour. (Round your answer to 2 decimal places.)
Overhead rate per machine hr.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. (Round your answer to 2 decimal places.)
a.Total overhead b.Overhead cost per boxStep by Step Solution
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