Question
The controller for Vitrina Inc. has established the following activity cost pools and cost drivers. BudgetedBudgeted OverheadLevel for Activity Cost Pool CostCost DriverCost Driver Machine
The controller for Vitrina Inc. has established the following activity cost pools and cost drivers.
BudgetedBudgeted
OverheadLevel for
Activity Cost Pool CostCost DriverCost Driver
Machine setups$200,000Number of setups160
Material handling100,000Weight of material50,000 kilograms
Waste control50,000Weight of chemicals10,000 kilograms
Quality control75,000Number of inspections 300
Other overhead costs200,000Machine hours20,000
Required:
1 Calculate the overhead that should be assigned to each minimum order of film chemicals using the above data.
2 Calculate the overhead that should be assigned to each minimum order of film chemicals if Vitrina decides to use a single predetermined overhead rate based on machine hours.
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