Snap Prints Company is a small printing and copying fi rm with
three high-speed
offset printing presses, fi ve copiers (two color and three
black-and-white), one collator,
one cutting and folding machine, and one fax machine. To improve
its pricing prac-
tices, owner-manager Terry Morton is installing activity-based
costing. Additionally,
Terry employs fi ve employees: two printers/designers, one
receptionist/bookkeeper, one
salesperson/copy-machine operator, and one janitor/delivery clerk.
Terry can operate
any of the machines and, in addition to managing the entire
operation, he performs the
training, designing, selling, and marketing functions.
Instructions
As Snap Prints’ independent accountant who prepares tax forms and
quarterly fi nancial
statements, you have been asked to identify the activities that
would be used to accumu-
late overhead costs for assignment to jobs and customers. Using
your knowledge of a small
printing and copying fi rm (and some imagination), identify at
least 12 activity cost pools
as the start of an activity-based costing system for Snap Prints
Company.
The activity cost pools as the start of an activity-based costing system for Snap Prints Company are as follows: |
Designing |
Type of Printing (offset/letter press) |
Hiring and training personnel |
Copying |
Accounting |
Purchasing supplies and materials |
Machine Proof requirements |
Number of Colours |
Delivery |
Gumming |
Type & size of cartons |
Maintenance and repairs |
Billing and collecting |
Selling, promoting, and marketing |
Hiring and training personnel |
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