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Stage 1 ABC For Machine Shop: Assigning Costs to Activity As the chief engineer of a small fabrication shop, Brenda Tolliver refers to herself as

Stage 1 ABC For Machine Shop: Assigning Costs to Activity

As the chief engineer of a small fabrication shop, Brenda Tolliver refers to herself as a "jack-of-all-trades." When an order for a new product comes in, Brenda 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, Brenda 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.

Brenda 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. Brenda's estimates (in percent) of time spent on each of theses activities last year are as follows:

Unit level activities:
Supervising production 25%
Batch level activities:
Scheduling jobs 18%
Supervising setups 7%
Inspecting first units 1%
Product level activities:
Designing product 15%
Preparing bills of materials 5%
Preparing operations lists 8%
Facility level activities:
Training employees 14%
Maintaining facility 5%
Attending professional meetings 2%
100%

Assuming Brenda Tolliver's salary is $132,000 per year, determine the dollar amount of her salary assigned to unit-, batch-, product-, and facility-level activities.

% of Time Spent on Activity Assignment of Salary
Unit level:
Supervising production Answer
Total Answer Answer
Batch level:
Job scheduling Answer
Supervising setup Answer
First unit inspection Answer
Total Answer Answer
Product level:
Product design Answer
Preparing bills of materials Answer
Preparing operations lists Answer
Total Answer Answer
Facility level:
Employee training Answer
Facility maintenance Answer
Attending professional meetings Answer
Total Answer Answer
Grand total Answer Answer

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