Excellent Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages. For 2018 Excellent 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

$ 120,000

300 design changes

Setups

640,000

5,000 setups

Inspections

80,000

8,000 inspections

Total manufacturing overhead costs

$840,000

During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

Activity

Money Managers

Hospital Systems

Pages

60,000

76,000

Design changes

10

0

Setups

20

10

Inspections

30

38

When costs are assigned using the single cost driver, number of pages printed, then ________.

A. Money Managers will likely seek to do business with competitors

B. Money Managers is grossly under billed for the job, while other jobs will be unfairly over billed

C. Excellent Printers will want to retain this highly profitable customer

D. Money Managers is unfairly over billed for its use of printing resources