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ACTIVITY$-$BASED COSTING The financial controller for Magik Fertilizers Sdn Bhd has established the following activity cost pools and cost drivers. Activity Cost Pools Budgeted Overhead Costs Cost Driver Budgeted Level for Cost Driver Activity Rate Machine setups RM$250,000$ Number of setups $125$ RM$2000$ per setup Material handling RM$75,000$ Weight of raw material $18,750$ kg RM$4$ per kg Hazardous waste control RM$25,000$ Weight of hazardous chemical used $2,500$ kg RM$10$ per kg Quality control RM$75,000$ Number of inspections $1,000$ RM$75$ per inspection Other overhead costs RM$200,000$ Machine hours $20,000$ RM$10$ per machine hour Total RM$625,000$ An order for $1,000$ bags of Nitrogen Plus fertilizer has the following production requirements. Machine setups $5$ setups Raw materials $5,000$ kg Hazardous materials $1,000$ kg Inspections $10$ inspections Machine hours $500$ machine hours Required: a$.$ Compute the total overhead that should be assigned to the Nitrogen Plus fertilizer using activity$-$based costing. b$.$ Determine the overhead cost per bag of the fertilizer using activity$-$based costing. c$.$ Suppose Magik Fertilisers Sdn Bhd were to use a single predetermined overhead rate based on machine hours. Compute the rate per machine hour. How much of the total overhead would be assigned to Nitrogen Plus fertilizer order?

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