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Tony Corporation has established the following activity pools and cost drivers: Activity Pool Budgeted Overhead Cost Cost Driver Machine setup Activity $150,000 Number of machine

Tony Corporation has established the following activity pools and cost drivers:

Activity Pool

Budgeted

Overhead Cost

Cost Driver

Machine setup Activity

$150,000

Number of machine setups

Material handling Activity

52,500

Units of raw material

Quality control (inspection) Activity

37,500

Number of inspections

Miscellaneous Activity

90,000

Machine hours

Total

$330,000

Activity Pool

Budgeted Level

for Cost Driver

Machine setup Activity

100 setups

Material handling Activity

50,000 units

Quality control (inspection) Activity

1,000 inspections

Miscellaneous Activity

10,000 machine hours

Order no. 522 has the following production requirements:

Machine setups

5 setups

Raw material

1,000 units

Inspections

12 inspections

Machine hours

600 machine hours

Required: Suppose that Tony Corporation was to use a single, predetermined overhead rate based on machine hours. Calculate total overhead assigned to order no. 522 (according to the traditional costing using predetermined overhead rate)

Select one:

a. $12,000

b. $19,800

c. $13,500

d. $12,600

e. $13,200

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