Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Baldwin Printers has contracts to complete weekly supplements required by forty-two customers. For the year 2020, manufacturing overhead cost estimates total $1,840,000 for an annual
Baldwin Printers has contracts to complete weekly supplements required by forty-two customers. For the year 2020, manufacturing overhead cost estimates total $1,840,000 for an annual production capacity of 20 million pages. For 2020, Baldwin 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 OH Activity Level Design changes $520,000 400 design changes Setups 1,040,000 8,000 setups Inspections 280,000 14,000 inspections Total manufacturing overhead costs $1,840,000 During 2020, two customers, wellington Drugs and Home Again, are expected to use the following printing services: Activity Wellington Drugs Home Again Pages Printed 90,000 56,000 Design Changes Setups Inspections What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 20 million pages of production capacity? Select one: O a. $0.10 per page O b. $0.07 per page O c. $0.092 per page O d. $1.84 per page Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for Wellington Drugs during 2020? Select one: O a. $5,000 O b. $8,280 O C.$11,200 O d. $18,500 Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspection cost pools? Select one: a. $360 per design change, $3.20 per setup, $6.40 per inspection O b. $1,680 per design change, $5.38 per setup, $42 per inspection c. $1,300 per design change, $130 per setup, $20 per inspection O d. $286 per design change, $15.38 per setup, $20 per inspection Using the three cost pools to allocate overhead costs, what is the total manufacturing overhead cost estimate for Wellington Drugs during 2020? Select one: a. $5,400 b. $9,100 O c. $10,800 O d. $10,192 When overhead costs are assigned using the single cost driver, number of pages printed, then Select one: O a. Baldwin Printers will want to retain this high-profitable customer. O b. Wellington Drugs will likely seek to do business with competitors in the future. O c. Wellington Drugs is unfairly overbilled for its use of printing resources. O d. Wellington Drugs is grossly underbilled for the job, while other jobs will be unfairly overbilled. With traditional costing systems, products manufactured in large batches and in large annual volumes may be because batch-related and product-sustaining costs are assigned using unit-related cost drivers. Select one: a. overcosted O b. undercosted O c. fairly costed O d. ignored
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started