Santana Corporation manufactures snowmobiles in its Blue Mountain, Wisconsin, plant. The following costs are budgeted for the

Question:

Santana Corporation manufactures snowmobiles in its Blue Mountain, Wisconsin, plant. The following costs are budgeted for the first quarter’s operations.

Machine setup, indirect materials ........ $ 4,000

Inspections ............................................... 16,000

Tests ............................................................ 4,000

Insurance, plant .....................................110,000

Engineering design ................................140,000

Depreciation, machinery .......................520,000

Machine setup, indirect labor ............... 20,000

Property taxes ......................................... 29,000

Oil, heating .............................................. 19,000

Electricity, plant lighting ........................ 21,000

Engineering prototypes ......................... 60,000

Depreciation, plant ............................... 210,000

Electricity, machinery ............................ 36,000

Machine maintenance wages ............... 19,000

Instructions

Classify the above costs of Santana Corporation into activity cost pools using the following: engineering, machinery, machine setup, quality control, factory utilities maintenance. Next, identify a cost driver that may be used to assign each cost pool to each line of snowmobiles.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...