One boom box is complex to make and is produced in many batches. Consider two types of boom boxes made by Hamilton, Inc. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facilitysustaining. Plant management, plant rent, and plant insurance, $\$ 925,000$ġ. Machine-related overhead costs such as depreciation, maintenance, production engineering, $\$ 1,500,000$ (These resources relate to the activity of running the machines.) Designing processes, drawing process charts, making engineering process changes for products, $\$ 775,000$į. costs incurred to set up machines each time a different product needs to be manufactured, $\$ 630,000$Į. Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $\$ 850,000$Ĭ. Indirect manufacturing labor costs such as supervision that supports direct manufacturing labor, $\$ 1,450,000$ī. The following costs were incurred in 2011 :a. The boom boxes differ significantly in their complexity and their manufacturing batch sizes. Hamilton, Inc., manufactures boom boxes (music systems with radio, cassette, and compact disc players) for several well-known companies.
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