For each of the following activities, indicate an appropriate allocation base
Activity Allocation Base
Warranty Services-Providing service for defective products
Setup-Setting up machines for production
Shipping-Shipping finished products to customers
Machining-Machine usage
Purchasing-Purchasing raw materials
What will be an ideal response
Students answers will vary. Suggest answers:
Activity Allocation Base
Warranty Services—Providing service for defective products Number of service calls
Setup—Setting up machines for production Number of batches
Shipping—Shipping finished products to customers Number of pounds of product shipped
Machining—Machine usage Number of machine hours
Purchasing—Purchasing raw materials Number of purchase orders
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