Shriver Company makes two types of circuit boards. One is a high-caliber board designed to accomplish the most demanding tasks; the other is a low-caliber board designed to provide limited service at an affordable price. During its most recent accounting period, Shriver incurred $360,000 of inspection cost. Shriver recently established an activity-based costing system that classifies its activities into four categories. Categories and appropriate cost drivers follow.

Allocate the inspection cost between the two products assuming that it is driven by
(a) Unit-level activities,
(b) Batch-level activities,
(c) Product-level activities,
(d) Facility-level activities.
Note that each allocation represents a separate alternative. In other words, the $360,000 of inspection cost will be allocated four times, once for each costdriver.

  • CreatedFebruary 07, 2014
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