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the following questions using the information below: Wallace Printing has contracts to complete weekly supplements required by forty-six customers. For the year 20X5, manufacturing overhead
the following questions using the information below: Wallace Printing has contracts to complete weekly supplements required by forty-six customers. For the year 20X5, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages. For 20X5 Wallace Printing decided to evaluate the use of additional cost pools. After analysing 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 $60,000 200 design changes Setups 320,000 4,000 setups Inspections 40,000 16,000 inspections Total manufacturing overhead costs $420,000 During 20X5, 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 2 Setups 20 10 Inspections 30 38 Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools? Answer $300 per change, $80 per setup, $2.50 per inspection $250 per change, $200 per setup, $3.75 per inspection $333 per change, $125 per setup, $4.00 per inspection $210 per change, $105 per setup, $26.25 per inspection
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