Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour.Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order?In total.Per box of testing agent. The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.Budgeted Levelfor Cost Driver10040,000 poundActivity Cost PoolMachine setupsMaterial handlingHazardous waste controlQuality controlOther overhead costsTotalAn order for 1,000 boxesMachine setupsRaw materialHazardous materialsInspectionsMachine hoursBudgetedOverhead Cost$ 200,000120,00030,000225,000200,000$ 775,000Cost DriverNumber of setupsWeight of raw materialWeight of hazardouschemicals usedNumber of inspectionsMachine hoursmedical-testing agent has the following production requirements.7 setups12,000 pounds5,000 pounds6,000 pound3,00020,00010 inspections500 machine hoursPool Rate$ 2,000 per setup$3 per pound$5 per pound$75 per inspection$10 per machine hour

PREDETERMINED OVERHEAD RATEPredetermined rate means the indirect cost rate.Predetermined overhead…

Answered: Suppose Tulsa Medical Supply Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose Tulsa Medical Supply Company were to use a single predetermined overhead rate based on machine hours. Compute the rate per hour.
Under the approach in requirement 3, how much overhead would be assigned to the medical-testing agent order?
1. In total.
2. Per box of testing agent.

The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.
Budgeted Level
for Cost Driver
100
40,000 pound
Activity Cost Pool
Machine setups
Material handling
Hazardous waste control
Quality control
Other overhead costs
Total
An order for 1,000 boxes
Machine setups
Raw material
Hazardous materials
Inspections
Machine hours
Budgeted
Overhead Cost
$ 200,000
120,000
30,000
225,000
200,000
$ 775,000
Cost Driver
Number of setups
Weight of raw material
Weight of hazardous
chemicals used
Number of inspections
Machine hours
medical-testing agent has the following production requirements.
7 setups
12,000 pounds
5,000 pounds
6,000 pound
3,000
20,000
10 inspections
500 machine hours
Pool Rate
$ 2,000 per setup
$3 per pound
$5 per pound
$75 per inspection
$10 per machine hour

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