Classifying costs and identifying the appropriate cost driverPutin Corporation, a furnitur

Classifying costs and identifying the appropriate cost driverPutin Corporation, a furnitur


Classifying costs and identifying the appropriate cost driver

Putin Corporation, a furniture manufacturer, uses an activity-based costing system. It has identified the following selected activities.

1. Incurring property taxes on factory buildings.

2. Incurring paint cost for furniture produced.

3. Setting up machines for a particular batch of production.

4. Inspecting wood prior to using it in production.

5. Packaging completed furniture in boxes for shipment.

6. Inspecting completed furniture for quality control.

7. Purchasing TV time to advertise a particular product.


a. Classify each activity as a unit-level, batch-level, product-level, or facility-level activity.

b. Identify an appropriate cost driver (allocation base) for each of the activities.

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