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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:

Compute the total overhead that should be assigned to the medical-testing agent order.

What is the overhead cost per box of testing agent?

Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour.

Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order?

In total.

Per box of testing agent.