ACC355 quiz 2 Velshi Printers has contracts to complete weekly advertising supplements required by forty-six customers.

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ACC 355-001
– Quiz #2 (Winter 2013)

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Home Quiz)

Velshi
Printers has contracts to complete weekly advertising supplements required
by forty-six customers. For the year 2010, manufacturing overhead cost
estimates total $840,000 for an annual production capacity of 12 million pages.

For
2010 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 $
120,000 300 design changes

Setups 640,000 5,000 setups

Inspections 80,000 8,000 inspections

Total manufacturing overhead costs $840,000

During
2010, two customers, Money Managers and Hospital Systems, are expected to use
the following printing services:

Activity Money
Managers
Hospital Systems

Pages 60,000 76,000

Design changes 10 0

Setups 20 10

Inspections 30 38

1)
Using ABC, calculate the
activity driver rate for each for each overhead activity.

2)
Using ABC, calculate the total
amount of overhead that will be allocated to each of the two customers given.

3)
Using ABC, calculate the
overhead cost per page for each of the two customers given.

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