Cost Hierarchy and Activity Measures (LO I ) The following activities are carried out in Greenberry Company,
Question:
Cost Hierarchy and Activity Measures (LO I
)
The following activities are carried out in Greenberry Company, a manufacturer of consumer goods.
a. Direct labor workers assemble a product.
b. Engineers design a new product.
c. A machine is set up to process a batch.
d. Numerically controlled machines cut and shape materials.
e. The personnel department trains new employees concerning company policies.
f. Raw materials are moved from the receiving dock to the production line.
g. A random sample of 10 units in each batch is inspected for defects.
Required:
1 Classify each activity as a unit-level, batch-level, product-level, or facility-level cost.
2. Provide at least one example of an allocation base (i.e., activity measure) that could be used to allocate the cost of each activity listed above.
Step by Step Answer:
Introduction To Managerial Accounting
ISBN: 9780073048833
3rd Edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen