Answer the Following Questions Using the Information Below

question 164

Multiple Choice

Answer the following questions using the information below:
Velshi Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2010, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2010 Velshi 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 2010, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

-Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for Money Managers during 2010?

• A)$5,000
• B)$3,500
• C)$4,200
• D)$6,000

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Definitions:

Cost Classifications

This refers to the categorization of costs based on their nature, behavior, or decision-making needs, such as fixed vs. variable costs, direct vs. indirect costs, or product vs. period costs.

Sales Commission

A form of payment to a salesperson for selling a product or service, typically a percentage of the sale amount.

Product Cost

The total cost incurred to create a product, encompassing direct materials, direct labor, and overhead costs.

Straight-Line Depreciation

A method of calculating the depreciation of an asset where the cost is evenly spread over its useful life.