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Answer the following question(s) using the information below. Ernsting Printers has contracts to complete weekly supplements required by forty-six customers. For the year 20x2, manufacturing
Answer the following question(s) using the information below. Ernsting Printers has contracts to complete weekly supplements required by forty-six customers. For the year 20x2, manufacturing overhead cost estimates total $420,000 for an annual production capaCity of 12 million pages. For 20x2 Ernsting Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis: Cost pool Manufacturing overhead costs Activity level Design changes $60,000 300 design changes Setups 320,000 5,000 setups Inspections 40,000 8,000 inspections Total manufacturing overhead costs $420,000 During 20x2, two customers, Wealth Managers and Health Systems, are expected to use the following printing services: Activity Wealth Managers Health Systems Pages 60,000 76,000 Design changes 10 0 Setups 20 10 Inspections 30 38 i)What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 12 million pages of production capacity? ' A. 30.35 per page B. $0.035 per page C. 30.05 per page i_:i D. $0.025 per page 2) Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for Wealth Managers during 20x2? A. $21,000 . $1,500 6. $2,100 . $2,700 3) Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools? O A. $180 per change, $76 per setup, $4 per inspection O B. $200 per change, $64 per setup, $5 per inspection O C. $150 per change, $64 per setup, $4 per inspection O D. $180 per change, $76 per setup, $5 per inspection 4) Using activity-based costing to allocate overhead costs, what is the total manufacturing overhead cost estimate for Wealth Managers during 20X2? O A. $4,020 O B. $6,850 O C. $3,430 O D. $3,250 5) When selling price is cost plus 25% and costs are assigned using the single cost driver, number of pages printed, then O A. Wealth Managers is unfairly over billed for its use of printing resources. O B. Ernsting Printers will want to drop Wealth Managers as a customer. O C. Wealth Managers will likely seek to do business with competitors. O D. Wealth Managers is under billed for the job, while other jobs will be unfairly over billed
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