Selecting an Activity Base

question 70

Essay

Selecting an activity base
Listed below are six activity cost pools used by the Keaton Corporation: Listed below are six activity bases used by Keaton to allocate manufacturing overhead costs to products.In the space provided next to each activity base,indicate for which of the above cost pools it is a cost driver.
________ (a)Number of equipment work orders related to each product line.
________ (b)Number of direct material purchase orders related to each product line.
________ (c)Number of production runs related to each product line.
________ (d)Square feet of direct materials warehouse space occupied by each product line.
________ (e)Number of machine hours required to produce each product line.
________ (f)Square feet of production space occupied by each product line.

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Definitions:

Reducing Imports

A strategy aimed at decreasing the volume of goods and services a country buys from abroad, often to support domestic production.

Voluntary Agreements

Contracts or arrangements entered into freely by parties without coercion, commonly seen in business or employment contexts.

Subsidies

Financial support provided by governments to entities, aimed at reducing the cost of services and goods, promoting economic and social policies.

Balance of Trade Deficit

A situation where the value of a country's imports exceeds the value of its exports, resulting in a net outflow of domestic currency to foreign markets.