The classification of the budgeted costs into their activity cost pools is as follows:
Engineering design $140,000
Engineering prototypes $60,000
Insurance, plant $110,000
Depreciation, machinery $520,000
Oil, heating $19,000
Depreciation, plant $210,000
Machine setup, indirect materials $4,000
Machine setup, indirect labor $20,000
Inspections $16,000
Tests $4,000
Electricity, plant lighting $21,000
Property taxes $29,000
Electricity, machinery $36,000
Machine maintenance wages $19,000
Activity cost pools are the major classifications of production activity costs into their cost drivers to make it easier to estimate costs according to the activity that consumed them.
The use of activity cost pools enables activity-based costing to be implemented.
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Machine setup, indirect materials $4,000
Inspections $16,000
Tests $4,000
Insurance, plant $110,000
Engineering design $140,000
Depreciation, machinery $520,000
Machine setup, indirect labor $20,000
Property taxes $29,000
Oil, heating $19,000
Electricity, plant lighting $21,000
Engineering prototypes $60,000
Depreciation, plant $210,000
Electricity, machinery $36,000
Machine maintenance wages $19,000
Classify the above costs of Santana Corporation into activity cost pools using the following: engineering, machinery, machine setup, quality control, factory utilities, and maintenance.
