The Skynet Company Is Noted for an Exceptionally Impressive Line

Essay

The Skynet Company is noted for an exceptionally impressive line of Mardi Gras masks.Skynet has established the following selling and distribution support activity-cost pools and their corresponding activity drivers for the year 2015:
$$\begin{array} { l r r } \text { Activity } & \underline { \text { Cost } } & \underline { \text { Cost driver } } \\\text { Marketing } & \$ 150,000 & \$ 1,250,000 \text { of sales } \\\text { Customer service } & 50,000 & 10,000 \text { customer } \\\text { Order execution } & 15,000 & 200 \text { orders } \\\text { Warehousing } & 15,000 & 125 \text { product lines }\end{array}$$ Required:
a.Determine the activity-cost-driver rate for each of the four selling and distribution activities.
b.Under what circumstances is it appropriate to use each of the activity-cost drivers?
c.Describe at least one possible negative behavioral consequence for each of the four activity-cost drivers.