The Party Costumes Company is noted for an exceptionally impressive line of Festival masks. Party Costumes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the year 2022: Activity Marketing Cost Cost driver £30,000 £500,000 of sales Customer service 10,000 5,000 customer Order execution 5,000 100 orders Warehousing 5,000 50 product lines
The Party Costumes Company is noted for an exceptionally impressive line of Festival masks. Party Costumes has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the year 2022: Activity Marketing Cost Cost driver £30,000 £500,000 of sales Customer service 10,000 5,000 customer Order execution 5,000 100 orders Warehousing 5,000 50 product lines
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1. Under what circumstances is it appropriate to use each of the activity-cost drivers?
2. Describe atleast one possible negative behavioural consequence for each of the four activity-cost drivers
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