Instructions
Classify the above costs of Santana Corporation into activity cost pools using the following : engineering , machinery , machine setup , quality control , factory utilities , and maintenance . Next , identify a cost driver that may be used to assign each cost pool to each line of snowmobiles .
E4-14
Venus Creations sells window treatments ( shades , blinds , and awnings ) to both commercial and residential customers . The following information relates to its budgeted operations for the current year .
The controller , Peggy Kingman , is concerned about the residential product line . She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers . In addition , the residential client base resides in close proximity to the company office , so travel costs are not as expensive on a per client visit for residential customers . As a result , she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed . Here are the three activity cost pools and related information she developed :
Activity Cost Pools Cost Drivers
Estimated Overhead
Scheduling and travel $ 85,000 Hours of travel