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3 years ago

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

Business

1 answer:

Umnica [9.8K]3 years ago

4 0

Answer:

Tulsa Medical Supply Company

1. Calculation of the unit cost of a production order for 100 specially coated plates used in cancer testing:

Direct materials $120 * 100 plates = $12,000

Direct labor 40 * 100 plates = 4,000

Overhead:

Machine setups $2,000 * 3 setups $6,000

Material handling $2 * 900 pounds 1,800

Hazardous control $5 * 300 pounds 1,500

Quality control $75 * 3 inspections 225

Other overheads $10 * 50 machine hours 500

Total overheads applied $10,025

Total manufacturing cost for 100 plates $26,025

Unit cost = $26,025/100 = $260.25 per plate

Explanation:

a) Data and Calculations:

Activity Cost Pool Budgeted Cost Driver Budgeted Level for

Overhead Cost 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 lb. $2 per pound

Hazardous waste control 25,000 Weight of hazardous chemicals used 5,000 lb. $ 5 per pound

Quality control 75,000 Number of inspections 1,000 $ 75 per inspection

Other overhead costs 200,000 Machine hours 20,000 $ 10 per machine hour

Total $ 625,000

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