Cost Pools and Cost Drivers Based on a Recent Study

question 128

Essay

Cost Pools and Cost Drivers Based on a recent study of its manufacturing operations Johnston Manufacturing Corporation has identified six resource consumption cost drivers.These cost drivers and their budgeted activity levels for the coming year are:

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Definitions:

Financial Statement Data

Information presented in financial statements, including the balance sheet, income statement, and cash flow statement, to inform users about a company's financial status.

Percent Of Fixed Assets

A financial ratio that indicates what portion of a company's total assets are made up of fixed assets, such as property, plant, and equipment.

Vertical Analysis

This is a method in financial statement analysis where each line item is listed as a percentage of another item. For income statements, each expense is presented as a percentage of sales, and on the balance sheet, each asset, liability, or equity is presented as a percentage of total assets.

Quick Assets

Cash and other current assets that can be easily converted to cash, such as temporary investments and accounts receivable.