Excellent Printers Has Contracts to Complete Weekly Supplements Required by Forty-Six

question 136

Multiple Choice

Excellent Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2018 Excellent 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 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

When costs are assigned using the single cost driver, number of pages printed, then ________.

• A) Excellent Printers will want to retain this highly profitable customer
• B) Money Managers will likely seek to do business with competitors
• C) Money Managers is unfairly over billed for its use of printing resources
• D) Money Managers is grossly under billed for the job, while other jobs will be unfairly over billed

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Definitions:

Goods-Producing Companies

Entities focused on manufacturing physical products as opposed to providing services.

Revenue Function

is a mathematical representation that shows how revenue changes in response to changes in sales volumes, prices, or other influencing factors.

Costs

The monetary value spent or required to buy, produce, accomplish, or maintain something.

Environmental Regulations

Rules and standards set by authorities to control the impact of human activities on the environment.