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Author Question: Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the ... (Read 40 times)

strangeaffliction

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on: Mar 6, 2021
Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $900,000 for an annual production capacity of 10 million pages.

For 2018, 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 poolManufacturing overhead costsActivity level
Design changes$190,000200 design changes
Setups550,0005,000 setups
Inspections160,00016,000 inspections
Total manufacturing overhead costs$900,000

During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

ActivityMoney ManagersHospital Systems
Pages70,00086,000
Design changes157
Setups188
Inspections2563

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? (Round the final answer to three decimal places.)
◦ $0.078 per page
◦ $0.035 per page
◦ $0.055 per page
◦ $0.09 per page
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by strangeaffliction on Mar 6, 2021

momtoalll

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Reply #1 on: Mar 6, 2021
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strangeaffliction

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Reply 2 on: Mar 6, 2021
Great answer, keep it coming :)

Chelseyj.hasty

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Reply 3 on: Yesterday
Excellent

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