Answer the Following Questions Using the Information Below:
Gold Coast

question 3

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:

$\begin{array} { l c c } \text { Activity } & \text { Wealth Managers } & \text { Health Systems } \\ \text { Pages } & 60000 & 76000 \\ \text { Design changes } & 10 & 2 \\ \text { Set-ups } & 20 & 10 \\ \text { Inspections } & 30 & 38 \end{array}$
-If manufacturing overhead costs are considered one large cost pool and are assigned based on 24 million pages of production capacity,what is the cost driver rate?

• A)$0.035 per page
• B)$0.05 per page
• C)$0.025 per page
• D)$0.25 per page

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money.

Unemployment

The situation in which individuals who are capable of working and are looking for a job are unable to find employment.

Federal Debt

A stock variable that measures the net accumulation of annual federal deficits.

Stock Variable

A measure of a quantity at a particular point in time, contrasting with flow variables, which are measured over a period of time.