Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below.
-Which of the following is a cost pool used with the activity-based costing method?
A)total selling and administrative expenses
B)direct materials dollars
C)total factory overhead
D)production setups

Question

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below.  ​
-Which of the following is a cost pool used with the activity-based costing method?
A)total selling and administrative expenses 
B)direct materials dollars 
C)total factory overhead 
D)production setups

Quizplus · Accepted Answer

Production setups are a cost pool used in activity-based costing, as they represent a group of costs associated with setting up equipment or machines for production runs, which is an activity that drives costs in this costing method.

Panamint Systems Corporation Is Estimating Activity Costs Associated with Producing