Answer the following questions using the information below:
Whitman Printing has contracts to complete weekly supplements required by forty-six customers. For the year 20X5, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2010 Whitman Printing 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 2010, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

-Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools?
A)$600 per change, $160 per setup, $5.00 per inspection
B)$500 per change, $400 per setup, $7.50 per inspection
C)$420 per change, $210 per setup, $52.50 per inspection
D)$666 per change, $250 per setup, $8.00 per inspection

Question

Answer the following questions using the information below:
Whitman Printing has contracts to complete weekly supplements required by forty-six customers. For the year 20X5, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2010 Whitman Printing 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 2010, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:
 
-Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools?
A)$600 per change, $160 per setup, $5.00 per inspection 
B)$500 per change, $400 per setup, $7.50 per inspection 
C)$420 per change, $210 per setup, $52.50 per inspection 
D)$666 per change, $250 per setup, $8.00 per inspection

Quizplus · Accepted Answer

The activity-cost driver rates are calculated based on the costs allocated to each activity-cost pool divided by the number of activities. The rates provided in option A are typical for such calculations.

Answer the Following Questions Using the Information Below