Answer the Following Question(s) Using the Information Below

question 37

Multiple Choice

Answer the following question(s) using the information below.
Wallace Printing has contracts to complete weekly supplements required by forty-six customers. For the year 2012, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 10 million pages.
For 2012 Wallace 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 2012, two customers, Wayward Insurance and Hapless Systems, are expected to use the following printing services:

-Using activity-based costing to allocate overhead costs, what is the total manufacturing overhead cost estimate for Hapless Systems during 2012?

• A) $3,113.75
• B) $1,495.00
• C) $2,068.00
• D) $3,412.50
• E) $3,665.00

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Definitions:

Traceable Fixed Expenses

Costs that are consistently the same in total but can be directly linked to a specific department, project, or product.

Net Operating Income

A profitability measure that calculates a company's income after operating expenses are subtracted but before deducting interest and taxes.

Break-even Sales

The amount of revenue needed to cover total costs, both fixed and variable, at which point a business neither makes a profit nor incurs a loss.

Wholesale Division

A segment of a company that deals with selling goods in large quantities at lower prices typically to retailers, rather than selling them directly to consumers.