Question

William Mendel & Sons, Inc. is a small manufacturing company in La Jolla that uses activity-based costing. Mendel & Sons accumulates overhead in the following activity cost pools.

For each activity cost pool, indicate whether the activity cost pool would be unit-level, batch-level, product-level, or facility-level.

Activity Cost Pools
1. Hiring personnel.
2. Managing parts inventory.
3. Purchasing.
4. Testing prototypes.
5. Designing products.
6. Setting up equipment.
7. Training employees.
8. Inspecting machined parts.
9. Machining.
10. Assembling.

Answer 1

The activity cost pools include hiring personnel, managing parts inventory, purchasing, testing prototypes, designing products, setting up equipment, training employees, inspecting machined parts, machining, and assembling.

Step-by-step explanation:

Activity Cost Pools and their Levels

Hiring personnel: Facility-level

Managing parts inventory: Batch-level

Purchasing: Batch-level

Testing prototypes: Product-level

Designing products: Product-level

Setting up equipment: Product-level

Training employees: Product-level

Inspecting machined parts: Product-level

Machining: Unit-level

Assembling: Unit-level