DATA INPUT
Budgeted Budgeted Level
Activity Cost Pool Overhead Cost Driver for Cost Driver Pool Rate
Machine setups 1,000,000$ Number of setups 250 4,000$
Material handling 300,000 Weight of raw material 75,000 4$
Hazardous waste control 100,000 Weight of hazardous chemicals used 10,000 10$
Quality control 300,000 Number of inspections 2,000 150$
Other overhead costs 800,000 Machine hours 40,000 20$
Total 2,500,000$
1,000 boxes of chemicals has the following production requirements
Machine setups 6 setups
Raw material 9,000 pounds
Hazardous materials 2,100 pounds
Inspections 8 inspections
Machine hours 550 machine hours
SOLUTION
1. Overhead to be assigned to chemical order:
Activity Cost Pool Assigned Overhead Cost
Machine setups 24,000$
2. Overhead cost per box of chemicals 93.20$
3. Predetermined overhead rate 62.50$
4. Overhead to be assigned to chemical order, given a single predetermined overhead rate: