Roberta, Inc., manufactures elliptical machines for several well-known companies. The machines differ significantly in their complexity and their manufacturing batch sizes. The following costs were incurred in 2017: (Click the icon to view the costs.) Read the requirements. - X i Requirements 1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining. Explain each answer. 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine, designed for home use, is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. 3. How is the cost hierarchy helpful to Roberta in managing its business? Print Done Cost-type a. Requirement 1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining. Explain each answer. Cost Item Indirect manufacturing labor costs such as supervision that supports direct manufacturing labor, $935,000 Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $650,000 Cost of indirect materials, $234,000 b. C. d. Costs incurred to set up machines each time a different product needs to be manufactured, $392,000 Designing processes, drawing process charts, making engineering process changes for products, $236,900 e. f. Machine-related overhead costs such as depreciation, maintenance, production engineering, $865,000 (These resources relate to the activity of running the machines.) Plant management, plant rent, and plant insurance, $498,000 g. Output unit-level costs are Batch-level costs are Facility-sustaining costs are Product-sustaining costs are Cost-type Requirement 1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining. Explain each answer. Cost Item a. Indirect manufacturing labor costs such as supervision that supports direct manufacturing labor, $935,000 b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $650,000 Cost of indirect materials, $234,000 C. Batch-level d. Costs incurred to set up machines each time a different product needs to be manufactured, $392,000 Facility-sustaining Output unit-level e. Product-sustaining f. Designing processes, drawing process charts, making engineering process changes for products, $236,900 Machine-related overhead costs such as depreciation, maintenance, production engineering, $865,000 (These resources relate to the activity of running the machines.) Plant management, plant rent, and plant insurance, $498,000 g. Output unit-level costs are Batch-level costs are Facility-sustaining costs are Product-sustaining costs are Requirement 1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining. Explain each answer. Cost Item Indirect manufacturing labor costs such as supervision that supports direct manufacturing labor, $935,000 Cost-type a. b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $650,000 Cost of indirect materials, $234,000 C. d. Costs incurred to set up machines each time a different product needs to be manufactured, $392,000 e. f. Designing processes, drawing process charts, making engineering process changes for products, $236,900 Machine-related overhead costs such as depreciation, maintenance, production engineering, $865,000 (These resources relate to the activity of running the machines.) Plant management, plant rent, and plant insurance, $498,000 g. Output unit-level costs are Batch-level costs are costs that can not be traced to individual products but support the company as a whole. Facility-sustaining costs are Product-sustaining costs ar costs used to support individual products regardless of the number of units or batches tested. related to a group of units of the product. They are not related to the number of units tested. related to the number of units tested; required for each unit tested. Requirement 2. Consider t machine is simple to make all overhead costs using me omplex to make and is produced in many batches. The other ake each type of elliptical machine and that Roberta allocates n why. The complex elliptical machine made in batches will use vbatch-level overhead resources compared to the simple elliptical machine that is made in vbatches Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use batch-level overhead resources compared to the simple elliptical machine that is made in batches. In addition, the complex machine will use overhead resources because it is complex. Because if Roberta uses only machine-hours to allocate overhead costs to elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use vbatch-level overhead resources compared to the simple elliptical machine that is made in V batches. In addition, the complex machine will use overhead resources because it is complex. few Because many vif Roberta uses only machine-hours to allocate overhead costs to elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in vbatches will use V batches. In addition, the complex machine will use v batch-level overhead resources compared to the simple elliptical machine that is made in vecause it is complex. significantly less Because significantly more if Roberta uses only machine-hours to allocate overhead costs to the same elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use vbatch-level overhead resources compared to the simple elliptical machine that is made in V batches. In addition, the complex machine will use overhead resources because it is complex. few Because many if Roberta uses only machine-hours to allocate over elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use batch-level overhead resources compared to the simple elliptical machine that is made in batches. In addition, the complex machine will use overhead resources because it is complex. Because less if Roberta uses only machine-hours to allocate overhead costs to more elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in vbatches will use V batches. vbatch-level overhead resources compared to the simple elliptical machine that is made in overhead resources because it is complex. In addition, the complex machine will use Because facility-sustaining if Roberta uses only machine-hours to allocate overhead costs to product-sustaining elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use vbatch-level overhead resources compared to the simple elliptical machine that is made in vbatches. In addition, the complex machine will use overhead resources because it is complex. Because if Roberta uses only machine-hours to allocate overhead costs to elliptical n each elliptical machine requires the same amount of machine-hours As a resul the complex machine requires significantly more machine-hours than the simple machine the simple machine requires significantly more machine-hours than the complex machine Requirer The cost hierarchy can be helpful to Roberta in managing its business through: Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use V batches. vbatch-level overhead resources compared to the simple elliptical machine that is made in overhead resources because it is complex. In addition, the complex machine will use Because if Roberta uses only machine-hours to allocate overhead costs to both the simple and the complex machines will be allocated the same amount of overhead costs per machine the complex elliptical machine will be allocated a greater amount of overhead costs per machine than the simple machine the simple machine will be allocated a greater amount of overhead costs per machine than the complex machine OA. Pricing and product mix decisions, cost reduction and process improvement decisions, design decisions, and planning and managing activities. Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use vbatch-level overhead resources compared to the simple elliptical machine that is made in batches. In addition, the complex machine will use overhead resources because it is complex. Because if Roberta uses only machine-hours to allocate overhead costs to elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 3. How is the cost hierarchy helpful s business? overcosted The cost hierarchy can be helpful to Roberta in ma gh: properly costed undercosted O A. Pricing and product mix decisions, cost rei OB. Reducing the number of indirect cost pools, unit-level. ovement decisions, design decisions, and planning and managing activities. 2ous indirect cost pools, allocating more indirect costs to cost objects, and identifying cost objects at the output Requirement 2. Consider two types of elliptical machines made by Roberta, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The other machine is simple to make and is produced in few batches. Suppose that Roberta needs the same number of machine-hours to make each type of elliptical machine and that Roberta allocates all overhead costs using machine-hours as the only allocation base. How, if at all, would the machines be miscosted? Briefly explain why. The complex elliptical machine made in batches will use vbatch-level overhead resources compared to the simple elliptical machine that is made in v batches. In addition, the complex machine will use overhead resources because it is complex. Because if Roberta uses only machine-hours to allocate overhead costs to elliptical machines. As a result, the complex elliptical machine will be and the simple machine will be Requirement 3. How is the cost hierarchy helpful to Roberta in managing its business? overcosted The cost hierarchy can be helpful to Roberta in managing its business through: properly costed undercosted O A. Pricing and product mix decisions, cost reduction and process improvement decisions, desig B. the number of indirect pools, creating less homogeneous indirect pools, unit-level. O C. Identifying the cost benefit of implementing a simple costing system. , and managing activities. Jsts to cost objects, and identifying cost objects at the output Requirement 3. How is the cost hierarchy helpful to Roberta in managing its business? The cost hierarchy can be helpful to Roberta in managing its business through: A. Pricing and product mix decisions, cost reduction and process improvement decisions, design decisions, and planning and managing activities. B. Reducing the number of indirect cost pools, creating less homogeneous indirect cost pools, allocating more indirect costs to cost objects, and identifying cost objects at the output unit-level. O C. Identifying the cost benefit of implementing a simple costing system. D. All of the above. Click to select your