Hello. I\'m needing help on question 5-52 (1-4) . I dont even know how to start
ID: 2329478 • Letter: H
Question
Hello. I'm needing help on question 5-52 (1-4) . I dont even know how to start since it dont give direct material or direct labor information.
r Tulsa Medical Supply Company has established the following activity cost pools and Acth cost drivers. Budgeted Overhead Cost Budgeted Level for Cost Driver Driv (LO 5-5 Activity Cost Pool Machine setups. Material handling Cost Driver Number of setups Weight of raw material Weight of hazardous Pool Rate $2,000 per setup $2 per pound $250,000 75,000 125 37,500 lb. rate Hazardous waste control Quallty control Other overhead costs... Total 25,000 75,000 200,000 $625,000 chemicals used Number of inspections Machine hours 5,000 lb. 1,000 $5 per pound $75 per inspection $10 per machine hour 20,000 An order for 1,000 boxes of medical-testing agent has the following production requirements Machine setups Raw material Hazardous materials Inspections Machine hours 5 setups 10,000 pounds 2,000 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.Explanation / Answer
Solution 1:
Solution 2:
Overhead cost per box of testing agent = Total allocated overhead / Nos of boxes = $45,750 / 1000 = $45.75 per box
Solution 3:
Pre determined overhead rate per machine hour = Estimated overhead / Estimated machine hours
= $625,000 / 20000 = $31.25 per machine hour
Solution 4:
Overhead to be assigned to medical testing agent order = Nos of machine hours * Overhead rate
= 500 * $31.25 = $15,625
Overhead cost per box of testing agent = Total allocated overhead / Nos of boxes = $15,625 / 1000 = $15.625 per box
Computation of overhead cost to be assigned to Medical testing agent order - Tulsa Medical Supply Company Activity cost pool Activity Base Qty of cost driver for order Activity rate Allocated overhead Machine setups Nos of setups 5 $2,000.00 $10,000.00 Material handling Weight of raw material 10000 $2.00 $20,000.00 Hazardous waste control Weight of hazardous material used 2000 $5.00 $10,000.00 Quality control Nos of inspections 10 $75.00 $750.00 Other overhead cost Machine hours 500 $10.00 $5,000.00 Total overhead $45,750.00Related Questions
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