Xylon Corp. has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $900,000 for an annual production capacity of 10 million pages.
For 2018, Xylon 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 2018, two customers, Money Managers and Hospital 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? (Round the final answer to three decimal places.)
Definitions:
Administrative Expense
Expenses related to the general operation of a business, excluding production, marketing, and direct labor costs.
Period Cost
Expenses that are not directly tied to production activity and are expensed in the period they are incurred.
Production Supervisor's Salary
The compensation paid to the individual responsible for overseeing and managing the daily operations of the production floor.
Factory Overhead
All indirect costs associated with the manufacturing process, including utilities, maintenance, and salaries of non-direct labor.
Q42: The margin of safety is the difference
Q49: It is important that the product costs
Q53: Which of the following is true with
Q59: When goods are finished, the Finished Goods
Q64: What are the direct costs of a
Q111: Explain sensitivity analysis and how do managers
Q120: Operating plans are generally expressed through long-run
Q149: Using job costing would not be appropriate
Q159: Modern manufacturing practices have helped reduce overhead
Q174: The number of units in the sales