ACCT 5320: .

061
Chap 5 practice

Daniel Morey
instructions | help

9.

aw ard:

0 out of 10.00 points The controller for Tulsa Photographic Supply Company has established the following activity cost pools and cost drivers. Budgeted Overhead Cost $250,000 75,000 25,000 75,000 200,000 $625,000 Budgeted Level for Cost Cost Driver Driver Number of setups 125 Weight of raw material 37,500 Ib. Weight of hazardous chemicals used 5,000 Ib. Number of inspection 1,000 Machine hours 20,000

Activity Cost Pool Machine setups Material handling Hazardous waste control Quality control Other overhead costs Total

Pool Rate $2,000 per setup $ 2 per pound $ $ $ 5 per pound 75 per inspection 10 per machine hour

An order for 1,000 boxes of film development chemicals 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 development-chemical order. (Omit the "$" sign in your response.) Total overhead $ n/r

2. What is the overhead cost per box of chemicals? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Overhead cost $ n/r 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. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Overhead rate $ n/r 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. Omit the "$" sign in your response.) Total overhead $ n/r

b. Per box of chemicals. (Round your answer to 3 decimal places. Omit the "$" sign in your response.) Overhead cost $ n/r per box

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The controller for Tulsa Photographic Supply Company has established the following activity cost pools and cost drivers. Budgeted Overhead Cost $250,000 75,000 25,000 75,000 Budgeted Level for Cost Cost Driver Driver Number of setups 125 Weight of raw material 37,500 Ib. Weight of hazardous chemicals used 5,000 Ib. Number of inspection 1,000

Activity Cost Pool Machine setups Material handling Hazardous waste control Quality control

Pool Rate $2,000 per setup $ 2 per pound $ $ 5 per pound 75 per inspection

Quality control Other overhead costs Total

75,000 200,000 $625,000

Number of inspection Machine hours

1,000 20,000

$ $

75 per inspection 10 per machine hour

An order for 1,000 boxes of film development chemicals 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 development-chemical order. (Omit the "$" sign in your response.) Total overhead $ 45,750

2. What is the overhead cost per box of chemicals? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Overhead cost $ 45.75 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. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Overhead rate $ 31.25 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. Omit the "$" sign in your response.) Total overhead $ 15,625

b. Per box of chemicals. (Round your answer to 3 decimal places. Omit the "$" sign in your response.) Overhead cost $ 15.625 per box

Explanation: 1.

Overhead to be assigned to film development chemical order: Activity Cost Pool Machine setups Material handling Hazardous waste control Quality control Other overhead costs Total Pool Rate $2,000 per setup $ 2 per pound $ 5 per pound $ 75 per inspection $ 10 per machine hour Level of Cost Driver 5 setups 10,000 pounds 2,000 pounds 10 inspections 500 machine hours Assigned Overhead Cost $10,000 20,000 10,000 750 5,000 $45,750

2.

Overhead cost per box of chemicals =

3.

45,750 1,000 boxes

= $45.75 per box

Predetermined = overhead rate

4.

total budgeted overhead cost total budgeted machine hours

$625,000 20,000

= $31.25 per machine hr.

Overhead to be assigned to film development chemical order, given a single predetermined overhead rate:
a.

Total overhead assigned = $31.25 per machine hr. 500 machine hr. = $15,625
b.

Overhead cost per box of chemicals =

$15,625 1,000 boxes

= $15.625 per box

1,000 boxes

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