Chapter 20, Problem 4E

Identify activity bases

From the following list of activity bases for an automobile dealership, select the base that would be most appropriate for each of these costs: (1) preparation costs (cleaning, oil, and gasoline costs) for each car received, (2) salespersons’ commission of 5% of the sales price for each car sold, and (3) administrative costs for ordering cars.

Number of cars sold

Dollar amount of cars ordered

Number of cars ordered

Number of cars on hand

Number of cars received

Dollar amount of cars sold

Dollar amount of cars received

Dollar amount of cars on hand