order for 1,000 boxes of medical-testing agent has the following production requirements. Machine setups 5 setups Raw material 12,000 pounds Hazardous materials 4,000 pounds Inspections 10 inspections Machine hours 500 machine ho
PR 5-52 (Algo) Activity Cost Pools; Cost Drivers; Pool Rates (LO 5-1, 5-2, 5-3, 5-4, 5-5, 5-7)
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The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.
| Activity Cost Pool | Budgeted Overhead Cost | Cost Driver | Budgeted Level for Cost Driver | Pool Rate | ||
|---|---|---|---|---|---|---|
| Machine setups | $ 450,000 | Number of setups | 150 | $ 3,000 | per setup | |
| Material handling | 60,000 | Weight of raw material | 30,000 | pound | $ 2 | per pound |
| Hazardous waste control | 50,000 | Weight of hazardous chemicals used | 5,000 | pound | $ 10 | per pound |
| Quality control | 150,000 | Number of inspections | 2,000 | $ 75 | per inspection | |
| Other overhead costs | 400,000 | Machine hours | 20,000 | $ 20 | per machine hour | |
| Total | $ 1,110,000 |
An order for 1,000 boxes of medical-testing agent has the following production requirements.
| Machine setups | 5 | setups |
|---|---|---|
| Raw material | 12,000 | pounds |
| Hazardous materials | 4,000 | pounds |
| Inspections | 10 | inspections |
| Machine hours | 500 | machine hours |
PR 5-52 (Algo) Part 1 The controller for Tulsa Medical Supply Company...
Required:
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Compute the total overhead that should be assigned to the medical-testing agent order.
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What is the overhead cost per box of testing agent?
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Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour.
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Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order?
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In total.
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Per box of testing agent.
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What about requirement 4?
Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order?
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In total.
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Per box of testing agent.
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