Wind-Driven Products, Inc. uses JIT manu- facturing and has the production process organized into manufacturing cells where each cell produces either a few products or major subassemblies. Cell workers are responsible for completing a quality product, setting up machinery, and maintain- ing all machinery in the cell. The following are the costs incurred either within each cell or for the benefit of each cell:

Transcribed Image Text:

(a) Raw materials (b) Direct labor (c) Salary of a cell supervisor (j) Oil for lubricating machinery (k) Cell equipment maintenance (1) Parts for machinery (d) Salary of the plant manager (m) Power (e) Salaries of janitors (n) Costs to set up machinery (f) Salary of an industrial engineer (o) Taxes on plant and equipment (g) Overtime wages for cell workers (p) Insurance on plant and equipment (h) Plant depreciation (q) Pencils and paper for cell supervisor (i) Depreciation on machinery Required: 1. Indicate the costs that can be identified directly with products without the use of cost drivers. 2. Group the remaining costs by similar activities. 3. Suggest an appropriate cost driver for assigning the costs of grouped activities to the product. (It is possible for some groupings to have a cost driver to trace the costs to another grouping of activities before assigning costs to products.)