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Author Question: Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the ... (Read 23 times)

jc611

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Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $940,000 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$160,000500 design changes
Setups692,0002,000 setups
Inspections88,0008,000 inspections
Total manufacturing overhead costs$940,000

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

ActivityMoney ManagersHospital Systems
Pages70,00086,000
Design changes113
Setups199
Inspections2664

Under ABC costing, what is the inspection cost allocated to Hospital Systems?
◦ $704
◦ $80
◦ $286
◦ $6,574


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Marked as best answer by jc611 on Mar 6, 2021

tsternbergh47

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jc611

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it


juliaf

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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