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QUESTION 27 Devon Mills incurs a variety of costs in producing several grades of carpet for the residential and commercial housing industries. The different grades
QUESTION 27 Devon Mills incurs a variety of costs in producing several grades of carpet for the residential and commercial housing industries. The different grades and styles are manufactured in batches or production runs. The company uses activity- based costing to assign overhead costs to its different product lines. Selected costs are provided in the following table: Cost Description Cost Hierarchy Cost Driver (U, B, P, or F) * Ja. Materials handling costs b. Set up costs for each production run Factory insurance costs d. Batch inspection costs Depreciation of factory building Indirect materials Utilities cost incurred to operate machinery Legal costs of protecting product patents i. Inventory storage costs * Please select only one of the four choices Required: Complete the missing items from above. Do not spend a lot of time on formatting. Simply write your responses in 3 columns. In the first column, list items a - i; in the next column, write the answer to #1 below; in the last column, write the answer to #2 below. There is no need to rewrite the "Cost Description." 1. In the Cost Hierarchy column, insert a (U) if the cost described is a unit-level cost, a (B) if a batch-level cost, a (P) if a product-level cost, or (F) if a facility-level cost. 2. In the Cost Driver column enter a cost driver (for example, direct labor hours) that you believe might be appropriate for allocating that particular cost to units of products
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