Answer the Following Questions Using the Information Below:
Gold Coast

question 65

Multiple Choice

Answer the following questions using the information below:
Gold Coast Printing has contracts to provide fortnightly advertising supplements to 94 customers.For the year 2018,manufacturing overhead cost estimates total $600 000 for an annual production capacity of 24 million pages.
For 2018,Gold Coast Printing decided to evaluate the use of additional cost pools.After analysing manufacturing overhead costs,it was determined that number of design changes,set-ups and inspections are the primary manufacturing overhead cost drivers.The following information was gathered during the analysis:
$\begin{array} { l r c } \text { Cost Pool } & \text { Manufacturing Overhead Costs } & \text { Activity Level } \\ \text { Design changes } & \$ 80000 & 200 \text { design changes } \\ \text { Set-ups } & 400000 & 4000 \text { set-1ps } \\ \text { Inspections } & 120000 & 16000 \text { inspections } \\ \text { Total manufacturing overhead costs } & \$ 600000 & \end{array}$

During 2018, two customers, Wealth Managers and Health Systems, are expected to use the following printing services:

$\begin{array} { l c c } \text { Activity } & \text { Wealth Managers } & \text { Health Systems } \\ \text { Pages } & 60000 & 76000 \\ \text { Design changes } & 10 & 2 \\ \text { Set-ups } & 20 & 10 \\ \text { Inspections } & 30 & 38 \end{array}$
-Using the cost driver rate determined in the previous question,what is the manufacturing overhead cost estimate for Health Systems during 2018?

• A)Manufacturing overhead costs applied to Health Systems total $2660.
• B)Manufacturing overhead costs applied to Health Systems total $1900.
• C)Manufacturing overhead costs applied to Health Systems total $2100.
• D)Manufacturing overhead costs applied to Health Systems total $3800.