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    Activity Based Costing and Overhead Costs

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    The controller for Tulsa Photographic Supply Company has established the following activity cost pools and cost drivers.

    Activity Cost Pool Budgeted
    Overhead
    Cost Cost Driver Budgeted Level
    for Cost
    Driver Pool Rate
    Machine setups $ 250,000 Number of setups 125 $ 2,000 per setup
    Material handling 75,000 Weight of raw material 37,500 Ib. $ 2 per pound
    Hazardous waste
    control 25,000 Weight of hazardous
    chemicals used 5,000 Ib. $ 5 per pound
    Quality control 75,000 Number of inspection 1,000 $ 75 per inspection
    Other overhead costs 200,000 Machine hours 20,000 $ 10 per machine hour

    Total $ 625,000

    An order for 1,000 boxes of film development chemicals has the following production requirements.

    Machine setups 5 setups
    Raw material 10,000 pounds
    Hazardous materials 2,000 pounds
    Inspections 10 inspections
    Machine hours 500 machine hours

    Required:
    1.
    Compute the total overhead that should be assigned to the development-chemical order.

    Total overhead $

    2.
    What is the overhead cost per box of chemicals? (Round your answer to 2 decimal places

    Overhead cost $ per box

    3.
    Suppose Tulsa Photographic Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour.

    Overhead rate $ per machine hr

    4.
    Suppose Tulsa Photographic Supply Company were to use a single predetermined overhead rate based on machine hours, how much overhead would be assigned to the development-chemical order?

    a. In total. (Do not round your intermediate calculations.

    Total overhead $

    b.
    Per box of chemicals. (Round your answer to 3 decimal places.
    Overhead cost $ per box

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    Overhead costs

    The controller for Tulsa Photographic Supply Company has established the following activity cost pools and cost drivers. 

    Activity Cost Driver Overhead Cost Cost Driver Budgeted Level for Pool Budgeted Pool cost Rate
    Machine Setup $250,000 No of setups 125 $2,000 per setup
    Material Handling $75,000 Weight of raw material 37500 $2 per pound
    Hazardous waste Control $25,000 Weight of hazardous chemical used 5000 $5 per pound
    Quality ...

    Solution Summary

    This solution provides a complete computation of the given accounting problem formatted in Excel.

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