The controller for Tulsa Medical 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 Lb. $2 per pound Hazardous Waste Control 25,000 Weight of hazardous Chemical used 5,000 Lb. $5 per pound Quality Control 75,000 Numbers of Inspections 1,000 $75 per inspection Other Overhead cost 200,000 Machine Hours 20,000 $10 per hours Total $625,000 An order for 1,000 boxes of medical-testing agent 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 "Refer to the original data given in the preceding problem for Tulsa Medical Supply Company. Required: 1.Calculate the unit cost of a production order for 100 specially coated plates used in cancer test-ing. In addition to direct material costing $120 per plate and direct labor costing $40 per plate, the order requires the following: Machine setups .............................................................................................3 Raw material ..............................................................................................900 pounds Hazardous materials ..................................................................................300 pounds Inspections ....................................................................................................3 Machine hours ..............................................................................................5 2.Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. (This will be an extension of the spreadsheet constructed for the preceding problem.) Show how the solution will change if the data given in the preceding problem change as follows: the overhead associated with machine setups is $375,000, and there are 500 inspections budgeted"
"The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.
|
Activity Cost Pool |
Budgeted |
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 Lb. |
$2 per pound |
|
Hazardous Waste Control |
25,000 |
Weight of hazardous Chemical used |
5,000 Lb. |
$5 per pound |
|
Quality Control |
75,000 |
Numbers of Inspections |
1,000 |
$75 per inspection |
|
Other Overhead cost |
200,000 |
Machine Hours |
20,000 |
$10 per hours |
|
Total |
$625,000 |
|
|
|
An order for 1,000 boxes of medical-testing agent 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
"Refer to the original data given in the preceding problem for Tulsa Medical Supply Company.
Required:
1.Calculate the unit cost of a production order for 100 specially coated plates used in cancer test-ing. In addition to direct material costing $120 per plate and direct labor costing $40 per plate, the order requires the following:
Machine setups .............................................................................................3
Raw material ..............................................................................................900 pounds
Hazardous materials ..................................................................................300 pounds
Inspections ....................................................................................................3
Machine hours ..............................................................................................5
2.Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. (This will be an extension of the spreadsheet constructed for the preceding problem.) Show how the solution will change if the data given in the preceding problem change as follows: the overhead associated with machine setups is $375,000, and there are 500 inspections budgeted"
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