Share
Explore BrainMass

Accounting-Wilmington, Inc.

4. Wilmington, Inc. manufactures five models of kitchen appliances at its Mesa plant. The company is installing activity-based costing and has identified the following activities performed at its Mesa plant.

1. designing new models
2. purchasing raw materials and parts.
3. storing and managing inventory.
4. receiving and inspecting raw materials and parts.
5. interviewing and hiring new personnel.
6. machine forming sheet steel into appliance parts.
7. manually assembling parts into appliances.
8. training all employees of the company.
9. insuring all tangible fixed assets.
10. supervising production.
11. maintaining and repairing machinery and equipment.
12. painting and packaging finished appliances.

For the activities above, what would be one or more cost drivers that might be used to assign overhead to Wilmington's five products?

Solution Preview

1. designing new models - LABOR HOURS IN DESIGNING

2. purchasing raw materials and parts. QUANTITY OF MATERIALS PURCHASED

3. storing and managing inventory. LABOR HOURS, QUANTITY OF PARTS IN INVENTORY

4. receiving and inspecting raw materials and parts. LABOR ...

Solution Summary

For the activities above, what would be one or more cost drivers that might be used to assign overhead to Wilmington's five products?

$2.19