The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Budgeted Level for Cost Driver 100 40,000 pound pound Activity Cost Pool Machine setups Material handling Hazardous waste control Quality control Other overhead costs Total Budgeted Overhead Cost $ 200,000 120,000 Hazardous materials Inspections Machine hours 30,000 225,000 200,000 $ 775,000 Cost Driver Number of setups Weight of raw material Weight of hazardous chemicals used Number of inspections Machine hours An order for 1,000 boxes of medical-testing agent has the following production requirements. Machine setups Raw material 7 setups pounds 12,000 5,000 pounds 6,000 3,000 20,000 10 inspections 500 machine hours Pool Rate $ 2,000 per setup $3 per pound $5 per pound $75 per inspection $10 per machine hour
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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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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