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

question 64

Multiple Choice

Excellent Printing 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 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 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 Hospital Systems ________.

• A) is fairly billed because resources are allocated uniformly to all jobs
• B) is grossly under billed for the job, while other jobs will be unfairly over billed
• C) will likely seek to do business with competitors
• D) will contribute too little to profits, and Wallace Printing will not want to accept additional work from the company

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Definitions:

Market Condition

Refers to the current state of a market including factors like supply and demand, economic indicators, and trends that affect the trading of goods and services.

Dishwasher Designs

The layout and features that are incorporated into the manufacturing of dishwashers, impacting functionality and user experience.

Expected Opportunity Loss

Expected opportunity loss is a decision-making tool, calculating the potential loss for not choosing the best course of action in uncertain situations.

Market Condition

The current status and dynamics of a market, including trends, demand, and competition.