Palisades Company identified the activities listed in the following as being most important (step 1 and step 2 of activity-based costing), and it formed cost pools for each activity.

1. Purchasing raw materials

2. Inspecting raw materials

3. Storing raw materials

4. Maintaining production equipment

5. Setting up machines to produce batches of product

6. Testing finished products

Required:

Perform step 3 of the activity-based costing process by identifying a possible cost driver for each activity.