Having itemized its costs for the first quarter of next years budget, Santana Corporation desires to install
Question:
Having itemized its costs for the first quarter of next year’s budget, Santana Corporation desires to install an activity-based costing system. First, it identified the activity cost pools in which to accumulate factory overhead; second, it identified the relevant cost drivers. (This was done in E17-8.)
Instructions
Using the activity cost pools identified in E17-8, classify each of those cost pools as either unit-level, batch-level, product-level, or facility-level.
Data from E17-8
Machine setup, indirect materials ................................ $ 4,000
Inspections ....................................................................... 16,000
Tests .................................................................................... 4,000
Insurance, plant .............................................................. 110,000
Engineering design ......................................................... 140,000
Depreciation, machinery ............................................... 520,000
Machine setup, indirect labor .......................................... 20,000
Property taxes .................................................................... 29,000
Oil, heating .......................................................................... 19,000
Electricity, plant lighting .................................................... 21,000
Engineering prototypes ..................................................... 60,000
Depreciation, plant ........................................................... 210,000
Electricity, machinery ......................................................... 36,000
Machine maintenance wages ............................................ 19,000
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Accounting Tools for business decision making
ISBN: 978-0470095461
4th Edition
Authors: kimmel, weygandt, kieso