Velshi Printers has contracts to complete weekly supplements required by forty−six

customers. For the year 2018, manufacturing overhead cost estimates total $600,000 for an annual production capacity of 12 million pages.

For 2018 Velshi Printers has 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	$120,000	500 design changes
Setups	380,000	4,000 setups
Inspections	100,000	9,000 inspections
Total manufacturing overhead costs	$600,000

 

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

 

Activity	Money Managers	Hospital Systems
Pages	70,000	86,000
Design changes	12	0
Setups	17	7
Inspections	26	34

 

Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for Money Managers during 2018?

 

Answer rating: 100% (QA)

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