$$840,000$ for an annual production capacity of $10$ million pages.

During the current year, 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

Design changes

Setups

Inspections

Total manufacturing overhead costs

Activity level

$200$ design changes

$4,000$ setups

$16,000$ inspections

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

Activity

Pages

Design changes

Setups

Inspections

Money Managers

$60,000$

$10$

$20$

$30$

Hospital Systems

$76,000$

$2$

$10$

$38$

Under ABC costing, what is the setup cost allocated to Hospital Systems?

Under ABC costing, what is the design changes cost allocated to Money Managers?

Selected Answer:

$$3,350$

Answers:

$$8,000$

$$1,600$

$$45,500$