i. Applying Activity Based costing: 

a. Calculate the total overhead cost that should be assigned to the order. 

b. Calculate the overhead cost per box order.

 ii. Applying a plant-wide pre-determined overhead rate based on machine hours:

 a. Calculate the total overhead cost that should be assigned to the order. 

b. Calculate the overhead cost per box ordered. 

 iii. Explain why these two product costing systems results in such widely differing costs. Which system do you recommend and why? 

The accountant for Click Photography Ltd has estimated the following cost pools and relevant activity drivers for the coming year: Activity Machine setups Material handling Hazardous waste Budgeted Overhead Cost Activity Driver $ 300,000 150,000 No. of setups Weight of raw material 75,000 Weight of hazardous control Quality control chemicals used 112,500 No. of inspections Other overhead costs 300,000 Machine hours Total $ 937,500 Budgeted level of Activity Driver 100 50 000 kg 10 000 kg 1 000 20 000 An order of 1 000 boxes of film development chemicals has been received, and the order has the following requirements: Machine setups Material handling Hazardous waste control Quality control Other overhead costs 4 setups 10 000 kg 2 000 kg 10 inspections 500 machine hours