66.7k views
1 vote
EA12.

LO 6.3Assign each of the following expenses to either the machine setup cost pool or the factory cost pool:

indirect materials
inspections
factory insurance
machine depreciation
machine setup (indirect labor)
machine setup (indirect material)

User Defarine
by
7.1k points

1 Answer

3 votes

Answer and explanation:

An activity cost pool is the total sum of the activities necessary to carry out a task within an organization. In terms of costs, the Activity-Based Costing method (ABC) is used. Typical applications for that approach is when a factory wants to determine costs for machine set-up. Factors to be considered may imply but are not limited to production, purchasing material, inspect products, assemble products, and technological production.

In the example:

Production

  • Machine setup (indirect labor)
  • Machine setup (indirect material)
  • Factory insurance

Purchasing material

  • Indirect materials
  • Machine depreciation

Inspect products

  • Inspections
User Marius Burz
by
6.7k points