Stage 1 ABC For Machine Shop: Assigning Costs to Activity

As the chief engineer of a small fabrication shop, Christine Sanders refers to herself as a "jack-of-all-trades." When an order for a new product comes in, Christine must do the following:

1. Design the product to meet customer requirements.

2. Prepare a bill of materials (a list of materials required to produce the product).

3. Prepare an operations list (a sequential list of the steps involved in manufacturing the product).

Each time the foundry manufactures a batch of the product, Christine must perform these activities:

1. Schedule the job.

2. Supervise the setup of machines that will work on the job.

3. Inspect the first unit produced to verify that it meets specifications.

Christinesupervises the production employees who perform the actual work on individual units of product. She is also responsible for employee training, ensuring that production facilities are in proper operating condition, and attending professional meetings. Christine's estimates (in percent) of time spent on each of these activities last year are as follows:

Assuming Christine Sanders' salary is $115,000 per year, determine the dollar amount of her salary assigned to unit-, batch-, product-, and facility-level activities. (You may need to review Chapter 14 before answering this question.)

Stage 1 ABC For Machine Shop: Assigning Costs to Activity As the chief engineer of a small fabrication shop, Christine Sanders refers to herself as a "jack-of-all-trades." When an order for a new product comes in, Christine must do the following: 1. Design the product to meet customer requirements. 2. Prepare a bill of materials (a list of materials required to produce the product). 3. Prepare an operations list (a sequential list of the steps involved in manufacturing the product). Each time the foundry manufactures a batch of the product, Christine must perform these activities: 1. Schedule the job. 2. Supervise the setup of machines that will work on the job. 3. Inspect the first unit produced to verify that it meets specifications. Christine supervises the production employees who perform the actual work on individual units of product. She is also responsible for employee training, ensuring that production facilities are in proper operating condition, and attending professional meetings. Christine's estimates (in percent) of time spent on each of these activities last year are as follows: Designing product 15% Preparing bills of materials 5% Preparing operations lists 9% Scheduling jobs 12% Supervising setups 6% Inspecting first units 7% Supervising production 25% Training employees 8% Maintaining facility 3% Attending professional meetings 10% 100%Assuming Christine Sanders' salary is $115,000 per year, determine the dollar amount of her salary assigned to unit-, batch-, product-, and facility-level activities. (You may need to review Chapter 14 before answering this question.) of Time Spent on Activity Assignment of Salary Unit level: 0 % Total 0 % $ 0 Batch level: Job scheduling 0 % 0 % 0% Total 0 % 0 Product level: Product design 0 % 0 % 0 % Total 0 % 0 Facility level: Employee training 0 % 0 % 0% Total 0 % 0 Grand total 0 % $ 0