Answer the following question(s)using the information below.Ernsting Printers has contracts to complete weekly supplements required by forty-six customers.For the year 2018, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages.For 2018 Ernsting 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:
During 2018, two customers, Wealth Managers and Health Systems, are expected to use the following printing services:

-What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 12 million pages of production capacity?
A)$0.05 per page
B)$0.035 per page
C)$0.35 per page
D)$0.025 per page
E)$0.045 per page

Question

Answer the following question(s)using the information below.Ernsting Printers has contracts to complete weekly supplements required by forty-six customers.For the year 2018, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages.For 2018 Ernsting 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:
  During 2018, two customers, Wealth Managers and Health Systems, are expected to use the following printing services:
 
-What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 12 million pages of production capacity?
A)$0.05 per page 
B)$0.035 per page 
C)$0.35 per page 
D)$0.025 per page 
E)$0.045 per page

Quizplus · Accepted Answer

To calculate the cost driver rate, we need to divide the total manufacturing overhead cost estimate by the total estimated production capacity in pages:
$420,000 / 12,000,000 pages = $0.035 per page.

Answer the Following Question(s)using the Information Below