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Velshi Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $700,000 for an annual
Velshi Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $700,000 for an annual production capacity of 10 million pages. For 2018 Velshi 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: Activity level Cost pool Design changes Setups Inspections Total manufacturing overhead costs Manufacturing overhead costs $100,000 500 design changes 550,000 3,000 setups 50,000 10,000 inspections $700,000 During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services: A. $6,078.33 B. $1,145.00 C. $5,896.67 D. $4,861.67
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