E4-10 Wilmington, Inc. manufactures ? ve models of kitchen appliances at its Mes

Question

E4-10 Wilmington, Inc. manufactures ? ve models of kitchen appliances at its Mesa plant.
The company is installing activity-based costing and has identi? ed the following activities
performed at its Mesa plant.
1. Designing new models.
2. Purchasing raw materials and parts.
3. Storing and managing inventory.
4. Receiving and inspecting raw materials and parts.
5. Interviewing and hiring new personnel.
6. Machine forming sheet steel into appliance parts.
7. Manually assembling parts into appliances.
8. Training all employees of the company.
9. Insuring all tangible ? xed assets.
10. Supervising production.
11. Maintaining and repairing machinery and equipment.
12. Painting and packaging ? nished appliances.
Having analyzed its Mesa plant operations for purposes of installing activity-based costing, Wilmington, Inc. identi? ed its activity cost centers. It now needs to identify relevant
activity cost drivers in order to assign overhead costs to its products.
Instructions
Using the activities listed above, identify for each activity one or more cost drivers that
might be used to assign overhead to Wilmington

Explanation / Answer

1. Designing new models.---design hours and number of new designs
2. Purchasing raw materials and parts.---------# of purchase orders and # of the line itesm
3. Storing and managing inventory. # of the line items and # of individual parts ,$ of inventory
4. Receiving and inspecting raw materials and parts.-------- # of shipment receiving and inspecting hours # of individual parts ,$
5. Interviewing and hiring new personnel.-------- # of interviews and # ofof new intevrieww
6. Machine forming sheet steel into appliance parts.-----forming hours
7. Manually assembling parts into appliances.-asembley hours
8. Training all employees of the company.------------- Training hours
9. Insuring all tangible ? xed assets.-assest value
10. Supervising production.------supervision hpours and number of employess , labour hours
11. Maintaining and repairing machinery and equipment.------repair and maintenance
12. Painting and packaging ? nished appliances.-pairing packing hours, of finished

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