Peter's Printers has contracts to complete the weekly attachments required by forty-six customers. For 2019, overall production cost estimates for an annual production capacity of 12 million pages total $420,000.

For 2019, Peter's Printers decided to evaluate the use of additional cost pools. After analyzing overall manufacturing costs, it was determined that the number of design changes, installations, and inspections were the primary manufacturing overall cost factors. The following information was collected during the analysis:

Cost pool	General production costs
Design changes	60.000 $
Installations	320.000
controls	40.000
Total production overheads	420.000 $

During 2019, two customers, World Makers and Happy Studios, are expected to use the following print services:

Activity	World Makers	Happy Studios
Pages	60.000	76.000
Design changes	10	0
Installations	20	10
controls	30	38

4. 
   

5. 1. What is the cost factor ratio if overall production costs are considered to be a large cost pool and assigned based on a production capacity of 12 million sheets?

5. 2. If we treat printed pages as the only overhead factor, what is the production overhead cost estimate for World Makers in 2019?

Answer rating: 100% (QA)

1To determine the cost factor ratio we need to divide each cost pool by the total production overhead costs General production costs Total production ... View the full answer