Ace Plastics produces different kinds of products, all in one manufacturing facility

They have identified four activities for their costing system:

Materials management-allocated by number of purchase orders
Chemical processing-allocated on metric tons
Molding-allocated on direct labor hours
Packaging-allocated by number of units produced

The activity rates are as follows:

Materials management $12.00 Per purchase order
Chemical processing $7.50 Per metric ton
Molding $24.00 Per direct labor hour
Packaging $0.10 Per unit

Engineering design shows that the order will require direct materials that cost $540; direct labor cost will be $90. The order will also require four purchase orders to be placed, use two metric tons of chemical base, and need eight direct labor hours. The size of the order is to produce 3,000 units of product. Calculate the total production of the order.
What will be an ideal response

Calculation of total cost of the order:
Direct materials $540.00
Direct labor 90.00
Overhead cost* 555.00
Total production cost $1,185.00

Computation of overhead cost of the order:*

Activity Cost driver Actual quantity of the allocation base used Predetermined overhead allocation rate Allocated manufacturing overhead cost
Materials management Purchase order 4 $12.00 $48.00
Chemical processing Metric ton 2 $7.50 $15.00
Molding Direct labor hour 8 $24.00 $192.00
Packaging Number of units 3,000 $0.10 $300.00
Total overhead cost $555.00