(a) Depreciation on factory equipment. (b) Depreciation on office equipment. (c)

Question

(a) Depreciation on factory equipment.

(b) Depreciation on office equipment.

(c) Depreciation on factory building.

(d) Advertising manager's salary.

(e) Assembly foreman's salary.

(f) Salespersons' salaries.

(g) Salespersons' travel expenses.

(h) Supplies for the Machining Department.

(i) Advertising supplies used.

(j) Electricity for the Assembly Department.

(k) Lost materials (scrap) in a Machining Department.

(l) Direct labor in the Assembly Department.

(m) Supplies for the sales office.

(n) Sales commissions.

(o) Packing supplies.

(p) Cost of hiring new employees.

(q) Payroll fringe benefits for workers in the Shipping Department.

(r) Supplies for Production Scheduling.

(s) Cost of repairing parts improperly manufactured in the Machining Department.

(t) Paint for the Assembly Department.

(u) Heat, light, and power for the factory.

(v) Leasing of computer equipment for the Accounting Department.

Specify an appropriate cost driver for tracing costs associated with the various levels of activities to the next cost objective or products, whichever is appropriate

Explanation / Answer

3. Specify an appropriate cost driver for tracing costs associated with the various
levels of activities to the next cost objective or products, whichever is
appropriate.
Cost
Cost Driver
(a) Depreciation on factory equipment.
Square Footage
(b) Depreciation on office equipment.
Square Footage
(c) Depreciation on factory building.
Cost of the Building
(d) Advertising manager's salary.
No. of employees managed
(e) Assembly foreman's salary.
Direct labour Hours or cost
(f) Salespersons' salaries.
No. of units sold
(g) Salespersons' travel expenses
Sales ratio
(h) Supplies for the Machining
No. of supplies in each department
Department.
(i) Advertising supplies used.
No. of units sold
(j) Electricity for the Assembly Department. No. of points in the department
(k) Lost materials (scrap) in a Machining
No. of materials moves
Department.
(l) Direct labor in the Assembly
Direct labour Hours or cost
Department.
(m) Supplies for the sales office.
No. of units for each

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