The controller for Wofford Machining has established the following overhead cost pools and cost drivers:

Overhead Cost PoolBudgeted Overhead Cost Cost Driver Budgeted Level for Cost Driver

Machine setups$240,000Number of setups 200 setups

Material handling90,000Units of raw material60,000 units

Quality control inspection 48,000 Number of inspections1,200 inspections

Other overhead costs 160,000Machine hours20,000 machine hours

Total$538,000

Order no. 715 has the following production requirements:

Machine setups: 7

Raw material: 11,200 units

Inspections: 16

Machine hours: 850

Required:A. Compute the total overhead that should be assigned to order no. 715 by using activity-based costing.

B. Suppose that Wofford were to use a single, predetermined overhead ratebased on machine hours.

Compute the rate per hour and the total overhead assigned to order no. 715.

C. Discuss the merits of an activity-based costing system in comparison with a traditional costing syst