Peter Corporation 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 10 million pages.

For 2019, Peter 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 $ 160,000 200 design changes Setups 670,000 4,000 setups Inspections 80,000 16,000 inspections Total manufacturing overhead costs $910,000

During 2019, two customers, College Systems and Clinic Managers, are expected to use the following printing services:

Activity College Systems Clinic Managers Pages 60,000 76,000 Design changes 10 2 Setups 20 10 Inspections 30 38

11) If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?

12) Under ABC costing, what is the inspection cost allocated to Peter Corporation?