Author Question: If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 ... (Read 122 times)

MirandaLo · **on:** Jul 5, 2018

If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?

Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the year 2015, manufacturing overhead cost estimates total 840,000 for an annual production capacity of 10 million pages.

For 2015, Xylon 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 Manufacturing overhead costs Activity level
Design changes 160,000 200 design changes
Setups 670,000 4,000 setups
Inspections 80,000 16,000 inspections
Total manufacturing overhead costs 910,000

During 2015, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

Activity Money Managers Hospital Systems
Pages 60,000 76,000
Design changes 10 2
Setups 20 10
Inspections 30 38

A) 0.750 per page
B) 0.240 per page
C) 0.670 per page
D) 0.091 per page

Question 2

The existence of the customer record, including the ___________________ ___________, provides the basic authorization required to accept and record the customer order.
Fill in the blank(s) with correct word