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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
100 specially coated containers
Direct material 210$ per container
Direct labor 60$ per container
Machine setups 4
Raw material 800 pounds
Hazardous materials 400 pounds
Inspections 4
Machine hours 60
SOLUTION
a. Overhead assigned to containers:
Activity Cost Pool Assigned Overhead Cost
Machine setups 16,000$
Material handling 3,200
b. Unit cost per container:
Direct material 210.00$
