Baldwin Printers has contracts to complete weekly supplements required by forty-two customers. For the year 2011, manufacturing overhead cost estimates total $1,840,000 for an annual production capacity of 20 million pages.
For 2011 Baldwin 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:
During 2011, two customers, Wellington Drugs and Home Again, are expected to use the following printing services:

-What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 20 million pages of production capacity?
A)$0.10 per page
B)$0.07 per page
C)$0.092 per page
D)$1.84 per page

Question

Baldwin Printers has contracts to complete weekly supplements required by forty-two customers. For the year 2011, manufacturing overhead cost estimates total $1,840,000 for an annual production capacity of 20 million pages.
For 2011 Baldwin 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: 
During 2011, two customers, Wellington Drugs and Home Again, are expected to use the following printing services:

-What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 20 million pages of production capacity?
A)$0.10 per page 
B)$0.07 per page 
C)$0.092 per page 
D)$1.84 per page

Quizplus · Accepted Answer

The cost driver rate is calculated by dividing the total manufacturing overhead costs by the total production capacity in pages. If the total overhead costs are not provided, the rate cannot be calculated directly from the given options. However, assuming the correct calculation was done, $0.092 per page is the correct rate based on the provided options.

Baldwin Printers Has Contracts to Complete Weekly Supplements Required by Forty-Two