Dickson Furniture Company incurred the following costs in the process of making tables and chairs:
Glue ......................................................Paint
Supervisor salaries ...............................Water bill
Gas bill ........................................Vacation pay
Payroll taxes ......................................Sewer bill
Cost of nails .........................................Staples
Medical insurance .............................Electric bill
Required
a. Organize the costs in the following three pools: indirect materials, indirect labor, and indirect utilities.
b. Identify an appropriate cost driver for each pool.
c. Explain why accountants use cost pools.