1. Assign each of the budgeted costs above to one of the following activity cost pools: ¢...
Question:
¢ Engineering
¢ Equipment setup
¢ Quality control
¢ Factory facilities
¢ Manufacturing equipment
2. Compute the total cost of each pool.
3. Indicate whether the activities in each pool are unit, batch, product, or facility level.
4. Identify the most likely driver for each cost pool from the following list:
¢ Number of inspections/tests
¢ Square feet
¢ Machine hours
¢ Engineering hours
¢ Number of setups
Use the following table to organize your answer. The engineering cost pool is done as an example. Other pools may have more than one cost item included.
Name of Budgeted Cost Budgeted Cost
Plant insurance.....................................................$ 86,100
Testing raw materials................................................45,000
Manufacturing equipment setup....................................7,200
Quality inspections..................................................57,000
Property taxes........................................................23,000
Electricity, plant.....................................................14,000
Electricity, manufacturing equipment............................51,250
Depreciation, plant.................................................18,800
Depreciation, manufacturing equipment........................36,700
Maintenance worker (manufacturing equipment)..............22,500
Indirect labor (manufacturing equipment setup)...............8,300
Design engineering..............................................220,000
Step by Step Answer:
Managerial Accounting
ISBN: 978-0077826482
3rd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips