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The Guy Fawkes Company is noted for an exceptionally impressive line of Mardi Gras masks. Guy Fawkes ...

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The Guy Fawkes Company is noted for an exceptionally impressive line of Mardi Gras masks. Guy Fawkes ...

The Guy Fawkes Company is noted for an exceptionally impressive line of Mardi Gras masks. Guy Fawkes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the current year:

   Activity   Cost   Cost driver
   Marketing   $60,000   $500,000 of sales
   Customer service   20,000   5,000 customer
   Order execution   10,000   100 orders
   Warehousing   10,000   50 product lines

Required:
a.   Determine the activity-cost-driver rate for each of the four selling and distribution activities.
b.   Under what circumstances is it appropriate to use each of the activity-cost drivers?
c.   Describe at least one possible negative behavioral consequence for each of the four activity-cost drivers.

Textbook

Cost Accounting: A Managerial Emphasis, Canadian Edition

Edition: 7^th

Authors: Horngren, Datar, Rajan, Beaubien

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mmm152001

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3 years ago

Perfect answer!

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Hasibur R.

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3 years ago

Perfect

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