Martin's Is a Store with Three Departments,Appliances,Tools,and Home Improvements

question 62

Essay

Martin's is a store with three departments,Appliances,Tools,and Home Improvements.The company expects to incur the following indirect costs related to its operations:
Store manager's salary
Store supplies
Electric bill
Clerical staff salaries
Payroll taxes
Office supplies
Water bill
Sewer bill
Medical insurance
Vacation pay
Required:
1)Organize the indirect costs into three cost pools: Store Administration,Utilities,and Fringe Benefit Costs,assuming that each department is a cost object
2)Identify an appropriate cost driver for each cost pool.

---

Definitions:

Market Risk

The risk of losses in investments due to factors that affect the entire market or economy.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all final goods and services produced by an economy in a given year at constant prices.

Stockholders

Individuals or entities that own shares in a corporation, giving them proportionate ownership depending on the amount of stock held.

Utility Function

A mathematical representation that ranks consumer preferences or satisfaction levels from consuming various goods or services.