For each of the following activities identify an appropriate ...

[Mr.Thesaxman]

For each of the following activities identify an appropriate activity-cost driver.
 
  a. machine maintenance
  b. machine setup
  c. quality control
  d. material ordering
  e. production scheduling
  f. warehouse expense
  g. engineering design

Question 2

For the year ending June 30, Island Clinical Services mistakenly omitted adjusting entries for (1) 1,500 of supplies that were used, (2) unearned revenue of 4,200 that was earned, and (3) insurance of 5,000 that expired. What is the combined effect of these errors on (a) revenues, (b) expenses, and (c) net income for the year ending June 30?

[makaylafy]

Answer to Question 1

Answer: Any one of the listed cost drivers is correct.

Answer to Question 2

(a) Revenues were understated by 4,200.
(b) Expenses were understated by 6,500 (1,500 + 5,000).
(c) Net income was overstated by 2,300 (6,500  4,200).