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Identifying Cost Drivers for a Service Company. McHale Architects, Inc., designs, engineers, and supervises the construction of custom homes. The following activities were identified as
Identifying Cost Drivers for a Service Company.McHale Architects, Inc., designs, engineers, and supervises the construction of custom homes. The following activities were identified as being most important (step 1 and step 2 of activity-based costing), and cost pools were formed for each activity:
- Meeting with customers
- Coordinating inspections with the building department
- Consulting with contractors
- Maintaining office equipment
- Processing customer billings (invoices)
Required:
Perform step 3 of the activity-based costing process by identifying a possible cost driver for each activity.
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