The Marionettes Company is noted for an exceptionally impressive line of Mardi Gras masks. Marionettes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the year 20X5:

Activity Cost Cost driver

Marketing $30,000 $500,000 of sales

Customer service 10,000 5,000 customer

Order execution 5,000 100 orders

Warehousing 5,000 50 product lines

Required:

a. Determine the activity-cost-driver rate for each of the four selling and distribution activities. (4 Marks)

b. Under what circumstances is it appropriate to use each of the activity-cost drivers? (2 Marks)

c. Describe at least one possible negative behavioral consequence for each of the four activity-cost drivers. (4 Marks)