Reference no: EM131840231
Question - Answer the following questions using the information below:
Wallace Printing has contracts to complete weekly supplements required by forty-six customers. For the year 20X5, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages.
For 20X5 Wallace Printing decided to evaluate the use of additional cost pools. After analysing 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 $60,000 200 design changes
Setups 320,000 4,000 setups
Inspections 40,000 16,000 inspections
Total manufacturing overhead costs $420,000
During 20X5, two customers, Wealth Managers and Health Systems, are expected to use the following printing services:
Activity Wealth Managers Health Systems
Pages 60,000 76,000
Design changes 10 2
Setups 20 10
Inspections 30 38
Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools?