Cost pool Manufacturing overhead costs Activity level Design changes $128,000 400 design changes Setups 550,000 1,600 setups Inspections 70,000 35,000 inspections Total manufacturing overhead costs $748,000 During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services: Activity Money Managers Hospital Systems Pages 70,000 86,000 Design changes 13 5 Setups 20 12 Inspections 450 600 Under Activity-based Costing, what is the setup cost allocated to Money Managers

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.