Reference no: EM132448720

Review the ABC cost allocation graphic provided by the instructor and respond to the questions / requirements below.

1. What cost drivers might be appropriate for the depreciation (DEP), interest (INT), operation and maintenance of plant (IPA), and general administration (IGA) cost pools?

2. What does the curved arrow from the general administration (IGA) cost pool to the operation and maintenance of plant (IPA) cost pool suggest? How would such a cost allocation work, logistically?

3. What are the "products" in this activity-based costing approach?

4. How might the burdened costs associated with the library (ILA) be allocated?

Review the 2018 Annual Report for Thor Industries (in particular the segment reporting that begins on page 40 of the PDF) and respond to the questions / requirements below.

1. What types of product costs does this company describe? Alternatively, what types of period costs does this company describe? Do these classifications seem appropriate?

2. What types of costs does this company include in manufacturing overhead, and are those costs appropriate? Which of the overhead costs are classified as fixed costs and which are classified as variable costs?

3. For the Towables segment of this company, what are the estimated fixed costs and variable costs per unit using the scattergraph method, the high-low method, and/or the regression method? (Data for the past six years, taken from the current and former Annual Reports, is noted below.)

2018: 240,865 units, with total costs of $5,431,022 thousand

2017: 213,562 units, with total costs of $4,617,289 thousand

2016: 128,932 units, with total costs of $2,987,182 thousand

2015: 115,685 units, with total costs of $2,822,275 thousand

2014: 100,685 units, with total costs of $2,488,808 thousand

2013: 99,202 units, with total costs of $2,432,562 thousand

2012: 87,872 units, with total costs of $2,116,904 thousand