Question: The controller for Wolfe Machining has established the following overhead cost pools and cost drivers: Wolfe Machining data Overhead Cost Pool Budgeted Overhead Cost Cost

The controller for Wolfe Machining has established the following overhead cost pools and cost drivers:

Wolfe Machining data

Overhead Cost Pool

Budgeted Overhead Cost

Cost Driver

Budgeted Level for Cost Driver

Machine set-ups

$240,000

Number of set-ups

200 set-ups

Material handling

$90,000

Units of raw material

60,000 units

Quality control inspection

$48,000

Number of inspections

1,200 inspections

Other overhead costs

$160,000

Machine hours

20,000 machine hours

Total

$538,000

Order No. 715 has the following production requirements:

Machine set-ups: 7

Raw material: 11,200 units

Inspections: 16

Machine hours: 850

Required:

Suppose that Wolfe were to use a single, predetermined overhead rate based on number of set-ups. Compute the rate per set-up and the total overhead assigned to Order No. 715.

Compute the total overhead that should be assigned to Order No. 715 by using activity-based costing.

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