Shaw Printers has contracts to complete weekly supplements required by forty-six customers. For the year...

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Accounting

Shaw Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2019, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages. Currently, company is allocating its manufacturing overhead costs using a single plantwide OH rate based on number of pages. For 2019 Shaw Printers has decided to evaluate the use of additional cost pools based on ABC concept. 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:

Cost pool

Manufacturing overhead costs

Activity level

Design changes

$120,000

300 design changes

Setups

640,000

5,000 setups

Inspections

80,000

8,000 inspections

Total manufacturing overhead costs

$840,000

During 2019, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:

Activity

Money Managers

Hospital Systems

Pages

60,000

76,000

Design changes

10

0

Setups

20

10

Inspections

30

38

Using current system, using pages printed as the only overhead cost driver, what is the factory overhead cost estimate for Money Managers during 2019?

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