Answer the following question(s)using the information below.Wallace Printing has contracts to complete weekly supplements required by forty-six customers.For the year 2019, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 10 million pages.For 2019 Wallace Printing 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:
During 2019, two customers, Wayward Insurance and Hapless Systems, are expected to use the following printing services:

-If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?
A)$0.25 per page
B)$0.05 per page
C)$0.025 per page
D)$0.042 per page
E)$0.42 per page

Question

Answer the following question(s)using the information below.Wallace Printing has contracts to complete weekly supplements required by forty-six customers.For the year 2019, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 10 million pages.For 2019 Wallace Printing 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:
  During 2019, two customers, Wayward Insurance and Hapless Systems, are expected to use the following printing services:
 
-If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?
A)$0.25 per page 
B)$0.05 per page 
C)$0.025 per page 
D)$0.042 per page 
E)$0.42 per page

Quizplus · Accepted Answer

To calculate the cost driver rate, we need to divide the manufacturing overhead cost estimates by the expected annual production capacity. So, the cost driver rate would be:

$420,000 / 10,000,000 pages = $0.042 per page

Therefore, the correct answer is D.

Answer the Following Question(s)using the Information Below