The following activities and costs are for Collins Company.

1. Direct materials used by workers to assemble products

2. Factory building rent

3. Machines set up to produce groups of products

4. New product research and development

5. Maintenance performed on the factory building

6. Direct labor assembling products

7. Product designed for a specific customer

8. Purchase requisitions issued for raw materials

Required:

a. Determine whether each item is a facility-level, product- or customer-level, batch-level, or unit- level cost.

b. Provide one example of an appropriate allocation base for each item. (For instance, an appropriate allocation base for item 1 is the quantity of direct materials used.)