Classifying the costs of unit-, batch-, product-, or facility-level activitiesDennis Manuf

Classifying the costs of unit-, batch-, product-, or facility-level activities

Dennis Manufacturing is developing an activity-based costing system to improve overhead cost allocation.

One of the first steps in developing the system is to classify the costs of performing production activities into activity cost pools.

Required

Using the four-tier cost hierarchy described in the chapter, classify each of the following costs into unit-level, batch-level, product-level, or facility-level cost pools.

 

 

Cost Activity

Cost Pool

a. Factory depreciation

 

b. Advertising costs for a particular product

 

c. Wages of assembly line workers

 

d. Product design costs

 

e. Materials requisition costs for a particular work order

 

f. Security guard wages

 

g. Lubricant for machines

 

h. Parts used to make a particular product

 

i. Machine setup cost

 

j. Salary of the plant manager’s secretary

 

 

 

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