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2. Texas Co. established the following overhead cost pools and cost drivers:

Budgeted    Estimated      Overhead Cost Pool Overhead  Cost Driver Cost Driver Level     Quality controls $780,000  # of inspections 26,000  inspections   Machine setups $720,000  # of setups 12,000  setups   Other overhead costs $900,000  # of machine hrs  50,000  machine hrs   Total overhead costs $2,400,000                     A recent order for sailboats used:           Quality inspections 750  inspections       Machine setups 500  setups       Machine hours (MHs) 2,400  machine hours
Required:

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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