1 answer

5. Jessica owns a small department store in a metropolitan area. For twenty years, the accountant...

Question:

5. Jessica owns a small department store in a metropolitan area. For twenty years, the accountant has applied overhead to the
5. Jessica owns a small department store in a metropolitan area. For twenty years, the accountant has applied overhead to the various departments -Women's Apparel Men's Apparel, Cosmetics, Housewares, Shoes, and Electronics-based on the basis of employee hours worked. Jessica's daughter, who is an accounting student at a local university, has suggested her mother should consider using activity-based costing (ABC). In an attempt to implement ABC, Jessica and her daughter have identified the following activities (9 pts) Instructions Determine a cost driver for each of the activities listed below. Cost Pool Cost Driver a. Placing orders b. Stocking merchandise C. Waiting on Customers d. Janitorial and maintenance e. Training employees 1 Administrative Advertising and Marketing h. Accounting and Legal Services Wrapping packages Page 3 of 5 759 Words English (US) 30 3

Answers

Cost Pool Cost Driver
a. Placing orders number of orders; volume of individual orders
b. Stocking merchandise number of orders; dollar volume of orders
c. Waiting on customers number of customers; dollar volume of sales
d. Janitorial and Maintenance square feet occupied; traffic through area
e.

Training employees

total number of employees; number of new employees
f. Administrative number of employees; dollar volume of business
g. Advertising and Marketing number of ad campaigns
h. Accounting and Legal Services dollar volume of sales
i. Wrapping packages number of packages
.

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