The controller for Vitrina Inc. has established the following activity cost pools and cost drivers.

Budgeted Budgeted

Overhead Level for

Activity Cost Pool Cost Cost Driver Cost Driver

Machine setups $200,000 Number of setups 160

Material handling 100,000 Weight of material 50,000 kilograms

Waste control 50,000 Weight of chemicals 10,000 kilograms

Quality control 75,000 Number of inspections 300

Other overhead costs 200,000 Machine hours 20,000

Each order must be a minimum of 1,000 boxes of film chemicals.

The production requirements for each minimum order are as follows:

Machine setups 5 setups

Material handling 1,500 kilograms

Waste Control 200 kilograms

Quality Control 5 inspections

Other Overhead Costs 500 machine hours

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.