The controller for Wolfe Machining has established the following overhead cost pools and cost drivers:...
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Accounting
The controller for Wolfe Machining has established the following overhead cost pools and cost drivers:
Overhead cost Pool
Budgeted overhead cost
cost driver
Machine setups
$240,000
number of setups
Material Handling
90,000
Units of raw material
Quality control inspection
48,000
Number of inspection
Other overhead costs
160,000
machine hours
total
$538,000
Over Head cost pool
Budgeted Level for Cost driver
Pool Rate
Machine setups
200 setups
$1,200 per setup
Material Handling
60,000 units
$1.50 per unit
Quality Control
1,200 inspections
$40 per inspection
Other overhead
20,000 machine hours
$ 8 per machine hour
Order no. 715 has the following production requirements: Machine setups: 5 Raw material: 10,700 units Inspections: 19 Machine hours: 790 a.[10 points] Compute the total overhead that should be assigned to order no. 715 by using activity-based costing.
b. [10 points] Suppose that Wolfe were to use a single, predetermined overhead rate based on machine hours. Compute the rate per hour and the total overhead assigned to order no. 715. .
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