LO 5-2 Exercise 5-3B Classifying costs and identifying the appropriate cost driver Sentry Corporation, a furniture manufacturer, uses an activity-based costing system. It has identified the following selected activities: 1. Packaging completed furniture in boxes for shipment. 2. Inspecting completed furniture for quality control. 3. Purchasing TV time to advertise a particular product. 4. Incurring property taxes on factory buildings. 5. Incurring paint cost for furniture produced. 6. Setting up machines for a particular batch of production. 7. Inspecting wood prior to using it in production. Required a. Classify each activity as a unit-level, batch-level, product-level, or facility-level activity. b. Identify an appropriate cost driver (allocation base) for each of the activities.
LO 5-2 Exercise 5-3B Classifying costs and identifying the appropriate cost driver Sentry Corporation, a furniture manufacturer, uses an activity-based costing system. It has identified the following selected activities: 1. Packaging completed furniture in boxes for shipment. 2. Inspecting completed furniture for quality control. 3. Purchasing TV time to advertise a particular product. 4. Incurring property taxes on factory buildings. 5. Incurring paint cost for furniture produced. 6. Setting up machines for a particular batch of production. 7. Inspecting wood prior to using it in production. Required a. Classify each activity as a unit-level, batch-level, product-level, or facility-level activity. b. Identify an appropriate cost driver (allocation base) for each of the activities.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:LO 5-2
Exercise 5-3B Classifying costs and identifying the appropriate cost driver
Sentry Corporation, a furniture manufacturer, uses an activity-based costing system. It has identified
the following selected activities:
1. Packaging completed furniture in boxes for shipment.
2. Inspecting completed furniture for quality control.
3. Purchasing TV time to advertise a particular product.
4. Incurring property taxes on factory buildings.
5. Incurring paint cost for furniture produced.
6. Setting up machines for a particular batch of production.
7. Inspecting wood prior to using it in production.
Required
a. Classify each activity as a unit-level, batch-level, product-level, or facility-level activity.
b. Identify an appropriate cost driver (allocation base) for each of the activities.
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