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Santana Corp

Price: $1.99


Santana Corporation manufactures snowmobiles in its Blue Mountain, Wisconsin,
plant. The following costs are budgeted for the first quarter’s operations.


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

Instructions
Classify the above costs of Santana Corporation into activity cost pools using the following:
engineering, machinery, machine setup, quality control, factory utilities, maintenance. Next,
identify a cost driver that may be used to assign each cost pool to each line of snowmobiles.

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