Question
This time, you get to invent a product and make-up the manufacturing steps . (You can use a product you know about and 'customize' it
This time, you get to invent a product and make-up the manufacturing steps. (You can use a product you know about and 'customize' it to make it yours - see the sample post below). You will also need to identify at least two activities and activity bases that could be used for allocating factory overhead under the ABC Cost Method. You might even want to get artsy like me and add some pictures - of the product or process (not required - just for fun).
Assume you have a manufacturing business.
- Describe a hypothetical item that you produce that would be accounted for under the ABC method.
- Describe the manufacturing process. Be sure to:
- Identify at least three activities in the production process.
- Identify at least two activity bases that would be appropriate to use for your product.
Sample post
My company, Waste Not, Want Now, manufacturers unique jewelry. One product is hand-painted necklaces made from paint runoff from canvas paintings from different suppliers (recycled paint drippings called paint skins).
Here are the steps in the manufacturing process:
- Direct materials requisitions: bring the raw materials (paint skins, silver, gold, glass & chains) to the correct departments (cutting, forming, & assembly)
- Activity bases: pounds of DM used (per type of DM)
- The cutting department glues the glass domes (round, heart, oval, etc) to the paint skins and then cuts them out
- Activity base: number of glass domes
- The forming department forms the gold or silver into trays that will hold the cut paint skins
- Activity base: DL hours
- The assembly department glues a glass dome with paint into the tray. Then they attach a chain.
- Activity base: DL hours
- Once the necklaces are assembled, quality controls spot checks a pre-determined number of necklaces (20%)
- Activity base: QC qty of necklaces checked (finished goods units times 20%)
- All necklaces are then packaged and placed in finished goods inventory until orders are received.
- Activity base: number of finished products
- Orders are packaged and shipped in the shipping department.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started