The controller of D-Day Chemical Supply has established the following activity centers with overhead costs and related cost drivers: Budgeted Overhead Costs Cost Drivers Budgeted Level for Cost Activity Centers Drivers Materials Handling Machine setups Hazardous waste Weight of raw materials 60,000 pounds Number of setups Weight of hazardous Materials Number of inspections Machine Hours P120,000 240,000 60,000 120 setups 12,000 pounds Quality Control Others 85,000 205.000 1,000 inspections 102,500 hours An order for 1,000 boxes of powdered chemicals has the following production requirements: Raw materials (in pounds) Machine setups Hazardous materials (in pounds) Inspections Machine hours 12,500 25 2,500 30 520

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Using ABC, the total overhead costs charged to the 1,000 boxes of powdered chemical is:

The controller of D-Day Chemical Supply has established the following activity centers with overhead costs and
related cost drivers:
Activity Centers
Budgeted Overhead
Costs
Cost Drivers
Budgeted Level for Cost
Drivers
Materials Handling
Machine setups
Hazardous waste
Weight of raw materials 60,000 pounds
Number of setups
Weight of hazardous
Materials
Number of inspections
Machine Hours
P120,000
120 setups
12,000 pounds
240,000
60,000
Quality Control
1,000 inspections
102,500 hours
85,000
Others
205,000
An order for 1,000 boxes of powdered chemicals has the following production requirements:
Raw materials (in pounds)
Machine setups
Hazardous materials (in pounds)
Inspections
Machine hours
12,500
25
2,500
30
520
Transcribed Image Text:The controller of D-Day Chemical Supply has established the following activity centers with overhead costs and related cost drivers: Activity Centers Budgeted Overhead Costs Cost Drivers Budgeted Level for Cost Drivers Materials Handling Machine setups Hazardous waste Weight of raw materials 60,000 pounds Number of setups Weight of hazardous Materials Number of inspections Machine Hours P120,000 120 setups 12,000 pounds 240,000 60,000 Quality Control 1,000 inspections 102,500 hours 85,000 Others 205,000 An order for 1,000 boxes of powdered chemicals has the following production requirements: Raw materials (in pounds) Machine setups Hazardous materials (in pounds) Inspections Machine hours 12,500 25 2,500 30 520
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