Excellent Printers Has Contracts to Complete Weekly Supplements Required by Forty-Six

question 38

Multiple Choice

Excellent Printers has contracts to complete weekly supplements required by forty-six customers.For the year 2018,manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2018 Excellent 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 2018,two customers,Money Managers and Hospital Systems,are expected to use the following printing services:

When costs are assigned using the single cost driver,number of pages printed,then ________.

• A)Excellent Printers will want to retain this highly profitable customer
• B)Money Managers will likely seek to do business with competitors
• C)Money Managers is unfairly over billed for its use of printing resources
• D)Money Managers is grossly under billed for the job,while other jobs will be unfairly over billed

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Definitions:

Trading Securities

Financial assets held by a firm for the purpose of short-term gain and which can be sold in the public market.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Total Cost

The complete cost of production or operations, including fixed and variable costs, that a company incurs in providing goods or services.

Available-for-Sale Securities

Financial assets such as stocks or bonds that are bought and held primarily for sale in the near term to generate income on short-term price differences.