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Calculate the overhead that should be assigned

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Reference no: EM132594345

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

                                        Budgeted                                Budgeted

                                           Overhead                             Level for

Activity Cost Pool Cost        Cost Driver                                 Cost Driver

Machine setups             $350,000                Number of setups 225

Material handling            125,000             Weight of material 25,000 kilograms

Waste control                 75,000              Weight of chemicals 7,500 kilograms

Quality control                110,000          Number of inspections 400

Other overhead costs         400,000            Machine hours 30,000

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

The production requirements for each minimum order are as follows:

Machine setups 10 setups

Material handling 2,500 kilograms

Waste Control 300 kilograms

Quality Control 4 inspections

Other Overhead Costs 750 machine hours

Required:

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

Question 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.

Reference no: EM132594345

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