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Unformatted text preview: of the overhead cost, inaccurate product costs are inevitable. Illustration 17-3 shows the design of a more complex activity-based costing system with seven activity cost pools for Lift Jack Company. Lift Jack Company manufactures two automotive jacks an automobile scissors jack and a truck hydraulic jack. Illustration 17-3 ABC system designLift Jack Company The Lift Jack Company illustration contains seven activity cost pools. In some companies the number of activities related to a cost pool can be substantial. For example, Clark-Hurth (a division of Clark Equipment Company ), a manufacturer of axles and transmissions, identified over 170 activities. Compumotor (a division of Parker Hannifin ) identified over 80 activities in just the procurement function of its Material Control Department....
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- Fall '11