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Q3: Ink Spot Printers, Inc. prints weekly newspaper ad supplements for its customers. The firm allocates its manufacturing overhead on the basis of the number
Q3: Ink Spot Printers, Inc. prints weekly newspaper ad supplements for its customers. The firm allocates its manufacturing overhead on the basis of the number of pages printed. For next year, the firm estimates $420,000 of overhead costs to print 12,000,000 pages. a) What is the MOH allocation rate based on number of pages? The firm is considering a change to activity-based costing, and has determined that design changes, setups, and inspections are the major overhead cost drivers. The following information was gathered during the analysis: b) What is the MOH allocation rate for design changes? What is the MOH allocation rate for setups? What is the MOH allocation rate for inspections? Wealth Managers and Health Systems are two of Ink Spot Printers'major customers. Next year, they are expected to use the following services: c) If MOH costs are assigned from on the basis of number of pages: MOH assigned to Wealth Managers = MOH assigned to Health Systems = d) If MOH costs are assigned using activity-based costing: MOH assigned to Wealth Managers = MOH assigned to Health Systems =
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