Question
Acoma Co. has identified one of its cost pools to be quality control and has assigned $156,600 to that pool. Number of inspections has been
Acoma Co. has identified one of its cost pools to be quality control and has assigned $156,600 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 32,500 inspections annually. Suppose Acoma manufactures two products that consume 16,900 (Product 1) and 15,600 (Product 2) inspections each.
Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the companys quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acomas product lines.
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