Jupplemens 1equired by forty - six customers. For the year 20 or 2018 Velshi Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing ost drivers. The following information was gathered during the analysis: Cost pool Design changes Setups nspections Total manufacturing overhead costs During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing Activity Pages Design changes Setups Inspections Assuming activity - cost pools are used, what are the activity- cost driver rates for design changes, setups, and O A. $1,600.00 per change, $308.33 per setup, $7.78 per inspection OB. $17.78 per change, $308.33 per setup, $700.00 per inspection OC. $26.67 per change, $7.78 per setup, $308.33 per inspection O D. $1,600.00 per change, $11.67 per setup, $205.56 per inspection

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $2,080,000 for an annual production capacity of 16 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:
Cost pool
Design changes
Manufacturing overhead costs
Activity level
100 design changes
$160,000
Setups
1,850,000
6,000 setups
Inspections
70,000
9,000 inspections
Total manufacturing overhead costs
$2,080,000
During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:
Activity
Money Managers
Hospital Systems
Pages
90,000
106,000
Design changes
Setups
Inspections
12
17
26
34
Assuming activity - cost pools are used, what are the activity - cost driver rates for design changes, setups, and inspections cost pools?
O A. $1,600.00 per change, $308.33 per setup, $7.78 per inspection
O B. $17.78 per change, $308.33 per setup, $700.00 per inspection
OC. $26.67 per change, $7.78 per setup, $308.33 per inspection
O D. $1,600.00 per change, $11.67 per setup, $205.56 per inspection
Transcribed Image Text:Velshi Printers has contracts to complete weekly supplements required by forty - six customers. For the year 2018, manufacturing overhead cost estimates total $2,080,000 for an annual production capacity of 16 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: Cost pool Design changes Manufacturing overhead costs Activity level 100 design changes $160,000 Setups 1,850,000 6,000 setups Inspections 70,000 9,000 inspections Total manufacturing overhead costs $2,080,000 During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services: Activity Money Managers Hospital Systems Pages 90,000 106,000 Design changes Setups Inspections 12 17 26 34 Assuming activity - cost pools are used, what are the activity - cost driver rates for design changes, setups, and inspections cost pools? O A. $1,600.00 per change, $308.33 per setup, $7.78 per inspection O B. $17.78 per change, $308.33 per setup, $700.00 per inspection OC. $26.67 per change, $7.78 per setup, $308.33 per inspection O D. $1,600.00 per change, $11.67 per setup, $205.56 per inspection
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