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The controller for Washington Co. established the following overhead cost pools and cost drivers:
| | Estimated | |
| | Budgeted | | Cost Driver | |
| Overhead Cost Pool | Overhead | Cost Driver | Level | |
| Quality controls | $60,000 | # of inspections | 2,000 | inspections |
| Machine setups | $100,000 | # of setups | 20,000 | setups |
| Other overhead costs | $90,000 | # of machine hrs | 2,500 | machine hrs |
| Total overhead costs | $250,000 | | | |
| | | | | |
| A recent order for sailboats used: | | | |
| Quality inspections | 400 | inspections | | |
| Machine setups | 2,500 | setups | | |
| Machine hours (MHs) | 300 | machine hours |
a. What is the overhead rate per machine hour if the number of machine hours (MHs)
is used as a single cost driver under traditional costing system?
b. Utilizing traditional costing, how much overhead is assigned to the order
based on machine hours as a single cost driver?
c. Utilizing ABC, how much total overhead is assigned to the order?
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