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Identify possible cost drivers for each cost pool

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The following are six cost pools established for a company using activity-based costing.The pools are related to the company's products using cost drivers.

Cost Pools:
1. Inspection of raw materials
2. Production equipment repairs and maintenance
3. Raw materials storage
4. Plant heat, light,water, and power
5. Finished product quality control
6. Production line setups

Required

For each of the preceding cost pools, identify a possible cost driver.

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Solution Summary

The response indicates three to four potential cost drivers for each cost pool. The theory for the cost drivers selected is included to assist the student in finding the pattern between driver and pools.

Solution Preview

1. Inspection of raw materials
Cost drivers: pound of raw materials, cost of raw materials purchased, and raw materials used

2. Production equipment repairs and maintenance
Cost drivers: machine ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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