Question
Assume that Gary Knitting Associates buy a new forklift for $40,000.00. It is expected that the forklift will last for five (5) years and then
Assume that Gary Knitting Associates buy a new forklift for $40,000.00. It is expected that the forklift will last for five (5) years and then spontaneously combust (at night, when nobody gets hurt) and have no residual value at the end of the five years. During its life, the forklift will provide annual savings in handling costs of $15,000.00. The forklift is exclusively used in the shipping department to load finished orders onto trucks. It can transport one case at a time, independent of the case size or order size. What would be the appropriate cost driver for the activity forklifting?
Select one:
a. Yardage.
b. Direct labor cost in the shipping department.
c. Direct labor hours in the shipping department.
d. Direct labor cost in the knitting department.
e. Number of cases.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started