It is difficult to distinguish between direct andindirect labor in many modern manufacturing plants. An employee might participatein a design review team, work on maintenance, and produce components, all in thesame day. Moreover, these plants are organized as a "factory within a factory," meaningthat each production line might be dedicated to a single product line. Thus, rather thangrouping like machines together, the factory is organized around production processesfor an individual product line. Each line would have its own labor, supervisors, production engineers, and so on, enabling it almost to act as a separate factory. This organization contrasts sharply with traditional systems where many product lines might sharethe machines.

Required:

What implication does the modern organization have for the traceability of costs? Howdoes this change affect the controllability of costs for decisions that affect the volume ofproduction? Decisions to add or drop products?