The Marionettes Company is noted for an exceptionally impressive line of Mardi Gras masks.Marionettes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the year 2012:
Required:
a.Determine the activity cost driver rate for each of the four selling and distribution activities.
b.Under what circumstances is it appropriate to use each of the activity cost drivers?
c.Describe at least one possible negative behavioral consequence for each of the four activity cost drivers.
Definitions:
Special Journal
A specialized accounting journal designed to record a specific type of transaction consistently, such as sales or purchases.
Electronic Accounting System
Computerized systems used for tracking and managing financial transactions and accounts.
General Ledger Accounting Systems
Comprehensive accounting systems that collect, classify, and summarize financial transactions to create financial statements.
Cash Receipts
The collection of money (cash, checks, wire transfers) by a business during a given period, often recorded in the cash receipts journal.
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