Chapter 6 Exercise 6-14 Activity-Based Costing [LO 5] 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
required
for each of the preceding cost pools, identify a possible cost driver.
Cost Pools
1. Inspection of raw materials
2. Production equipment repairs and
maintenance
Cost Driver
Number of Inspections or the hours of
inspection or production runs
Number of Machine Hours
3. Raw materials storage
Value of materials stored
4. Plant heat, light, water, and power
Number of Machine Hours
5. Finished product quality control
Number of Inspections
6. Production line setups
Number of Production setups