Answer the Following Questions Using the Information Below

question 62

Multiple Choice

Answer the following questions using the information below:
Whitman Printing has contracts to complete weekly supplements required by forty-six customers. For the year 20X5, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2010 Whitman 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 2010, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

-It is important that the product costs reflect as much of the diversity and complexity of the manufacturing process so that:

• A)product costs will reflect their relative consumption of resources
• B)nonvalue-added costs can be eliminated
• C)there is less likelihood of cross subsidizing of product costs
• D)All of these answers are correct.