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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 Inspections
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 Inspections Tests Insurance, plant Engineering design Depreciation, machinery Machine setup, indirect labor Property taxes Oil, heating Electricity, plant lighting Engineering prototypes Depreciation, plant Electricity, machinery Machine maintenance wages $4,000 16,000 4,000 110,000 140,000 520,000 20,000 29,000 19,000 21,000 60,000 210,000 36,000 19,000 Classify the above costs of Santana Corporation into activity cost pools using the following: engineering, machinery, machine setup, quality control, factory utilities, maintenance. Budgeted Costs Activity Cost Pool Machine setup, indirect materials Inspections Tests Insurance, plant Engineering design Depreciation, machinery Machine setup, Indirect labor Property taxes Oil, heating Electricity, plant lighting Engineering prototypes Depreciation, plant Electricity, machinery Machine maintenance wages Identify a cost driver that may be used to assign each cost pool to each line of snowmobiles. Budgeted Costs Cost Driver Machine setup, indirect materials Inspections Tests Insurance, plant Engineering design Depreciation, machinery Machine setup, indirect labor Property taxes Oil, heating Electricity, plant lighting Engineering prototypes Depreciation, plant Electricity, machinery Machine maintenance wages
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