The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost...

Transcribed Image Text:

The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Machine setups Budgeted Overhead Cost Cost Driver Number of setups Weight of raw material Budgeted Level for Cost Driver 110 30,000 pound Pool Rate $ 3,000 per setup $3 per pound Activity Cost Pool Material handling Hazardous waste control Quality control Other overhead costs Total $ 330,000 90,000 Weight of hazardous 70,000 chemicals used 150,000 Number of inspections 400,000 Machine hours 7,000 pound 2,000 20,000 $ 10 per pound $ 75 per inspection $ 1,040,000 An order for 5,000 boxes of medical-testing agent has the following production requirements. Machine setups 7 setups $ 20 per machine hour Raw material Hazardous materials Inspections Machine hours 12,000 pounds 4,000 pounds 10 inspections 500 machine hours Required: 1. Compute the total overhead that should be assigned to the medical-testing agent order. 2. What is the overhead cost per box of testing agent? 3. Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour. 4. Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order? a. In total. b. Per box of testing agent. The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. Machine setups Budgeted Overhead Cost Cost Driver Number of setups Weight of raw material Budgeted Level for Cost Driver 110 30,000 pound Pool Rate $ 3,000 per setup $3 per pound Activity Cost Pool Material handling Hazardous waste control Quality control Other overhead costs Total $ 330,000 90,000 Weight of hazardous 70,000 chemicals used 150,000 Number of inspections 400,000 Machine hours 7,000 pound 2,000 20,000 $ 10 per pound $ 75 per inspection $ 1,040,000 An order for 5,000 boxes of medical-testing agent has the following production requirements. Machine setups 7 setups $ 20 per machine hour Raw material Hazardous materials Inspections Machine hours 12,000 pounds 4,000 pounds 10 inspections 500 machine hours Required: 1. Compute the total overhead that should be assigned to the medical-testing agent order. 2. What is the overhead cost per box of testing agent? 3. Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour. 4. Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order? a. In total. b. Per box of testing agent.