The controller for Crombie Inc. has established the following activity cost pools and cost drivers.

BudgetedBudgeted

OverheadLevel for

Activity Cost Pool CostCost DriverCost Driver

Machine setups$350,000Number of setups225

Material handling125,000Weight of material25,000 kilograms

Waste control75,000Weight of chemicals 7,500 kilograms

Quality control110,000Number of inspections 400

Other overhead costs400,000Machine hours30,000

Each order must be a minimum of 1,000 boxes of film chemicals.

The production requirements for each minimum order are as follows:

Machine setups10 setups

Material handling2,500 kilograms

Waste Control300 kilograms

Quality Control4 inspections

Other Overhead Costs750 machine hours

Required:

1 Calculate the overhead that should be assigned to each minimum order of film chemicals using the above data.

2 Calculate the overhead that should be assigned to each minimum order of film chemicals if Crombie decides to use a single predetermined overhead rate based on machine hours.