Chapter 21, Problem 21.4EX

Identify activity bases

From the following list of activity bases for an automobile dealership, select the base that would be most appropriate for each of these costs: (1) preparation costs (cleaning, oil, and gasoline costs) for each car received, (2) salespersons’ commission of 5% of the sales price for each car sold, and (3) administrative costs for ordering cars.

a. Number of cars sold

b. Dollar amount of cars ordered

c. Number of cars ordered

d. Number of cars on hand

e. Number of cars received

f. Dollar amount of cars sold

g. Dollar amount of cars received

h. Dollar amount of cars on hand