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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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
Transcribed Image Text: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
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