Cost Drivers; Activity Cost Pools
Kentaro Corporation manufactures VCRs in its Tokyo plant. The following costs are budgeted for January. (Yen is the Japanese monetary unit.)
Raw materials and components. | 2,950,000 yen | |
Insurance, plant. | 600,000 | |
Electricity, machinery. | 120,000 | |
Electricity, light. | 60,000 | |
Engineering design. | 610,000 | |
Depreciation, plant. | 700,000 | |
Depreciation, machinery. | 1,400,000 | |
Custodial wages, plant. | 40,000 | |
Equipment maintenance, wages. | 150,000 | |
Equipment maintenance, parts. | 30,000 | |
Setup wages. | 40,000 | |
Inspection of finished goods. | 30,000 | |
Property taxes. | 120,000 | |
Natural gas, heating | 30,000 |
Required: Divide these costs into activity cost pools, and identify a cost driver for assigning each pool of costs to products. Calculate the total cost in each activity cost pool.
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