## Required Information ### Craft Pro Machining Overhead Costs Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. #### Production Activity Costs | Production Activity | Indirect Labor | Indirect Materials | Other Overhead | |------------------------|----------------|--------------------|----------------| | Grinding | $320,000 | | | | Polishing | | $135,000 | | | Product modification | 600,000 | | | | Providing power | | | $255,000 | | System calibration | 500,000 | | | #### Additional Information on Production Activity Drivers - **Grinding:** 13,000 machine hours - **Polishing:** 13,000 machine hours - **Product modification:** 5,100 engineering hours - **Providing power:** 17,000 direct labor hours - **System calibration:** 400 batches ### Job Details | | Job 3175 | Job 4286 | |--------------------|----------|----------| | Number of units | 200 units| 2,500 units| | Machine hours | 550 MH | 5,500 MH | | Engineering hours | 26 eng. hours | 32 eng. hours | | Batches | 30 batches | 90 batches | | Direct labor hours | 500 DLH | 4,375 DLH | This information is relevant for understanding the allocation of overhead costs in the manufacturing process and is part of a broader analysis of the efficiency and cost-effectiveness of production activities. **Educational Transcription:** **Data Overview:** - **Providing Power:** - 17,000 direct labor hours - **System Calibration:** - 400 batches **Job Details:** - **Job 3175:** - Number of units: 200 units - Machine hours: 550 MH - Engineering hours: 26 engineering hours - Batches: 30 batches - Direct labor hours: 500 DLH - **Job 4286:** - Number of units: 2,500 units - Machine hours: 5,500 MH - Engineering hours: 32 engineering hours - Batches: 90 batches - Direct labor hours: 4,375 DLH **Task Requirement:** 1. **Classify each activity as unit level, batch level, product level, or facility level:** - Grinding: [ ] - Polishing: [ ] - Product modification: [ ] - Providing power: [ ] - System calibration: [ ] **Graph/Diagram Explanation:** The document presents a table outlining data concerning two jobs (Job 3175 and Job 4286) with specifics on the number of units, machine hours, engineering hours, batches, and direct labor hours. Each job comprises different quantities, highlighting the scale of production and resource allocation. Below the job data, a classification activity table lists several production-related tasks that need to be categorized by their level of impact (unit, batch, product, or facility) for business process analysis.

## Required Information ### Craft Pro Machining Overhead Costs Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. #### Production Activity Costs | Production Activity | Indirect Labor | Indirect Materials | Other Overhead | |------------------------|----------------|--------------------|----------------| | Grinding | $320,000 | | | | Polishing | | $135,000 | | | Product modification | 600,000 | | | | Providing power | | | $255,000 | | System calibration | 500,000 | | | #### Additional Information on Production Activity Drivers - Grinding: 13,000 machine hours - Polishing: 13,000 machine hours - Product modification: 5,100 engineering hours - Providing power: 17,000 direct labor hours - System calibration: 400 batches ### Job Details | | Job 3175 | Job 4286 | |--------------------|----------|----------| | Number of units | 200 units| 2,500 units| | Machine hours | 550 MH | 5,500 MH | | Engineering hours | 26 eng. hours | 32 eng. hours | | Batches | 30 batches | 90 batches | | Direct labor hours | 500 DLH | 4,375 DLH | This information is relevant for understanding the allocation of overhead costs in the manufacturing process and is part of a broader analysis of the efficiency and cost-effectiveness of production activities. Educational Transcription: Data Overview: - Providing Power: - 17,000 direct labor hours - System Calibration: - 400 batches Job Details: - Job 3175: - Number of units: 200 units - Machine hours: 550 MH - Engineering hours: 26 engineering hours - Batches: 30 batches - Direct labor hours: 500 DLH - Job 4286: - Number of units: 2,500 units - Machine hours: 5,500 MH - Engineering hours: 32 engineering hours - Batches: 90 batches - Direct labor hours: 4,375 DLH Task Requirement: 1. Classify each activity as unit level, batch level, product level, or facility level: - Grinding: [ ] - Polishing: [ ] - Product modification: [ ] - Providing power: [ ] - System calibration: [ ] Graph/Diagram Explanation: The document presents a table outlining data concerning two jobs (Job 3175 and Job 4286) with specifics on the number of units, machine hours, engineering hours, batches, and direct labor hours. Each job comprises different quantities, highlighting the scale of production and resource allocation. Below the job data, a classification activity table lists several production-related tasks that need to be categorized by their level of impact (unit, batch, product, or facility) for business process analysis.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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## Required Information

### Craft Pro Machining Overhead Costs

Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.

#### Production Activity Costs

| Production Activity | Indirect Labor | Indirect Materials | Other Overhead |
|------------------------|----------------|--------------------|----------------|
| Grinding | $320,000 | | |
| Polishing | | $135,000 | |
| Product modification | 600,000 | | |
| Providing power | | | $255,000 |
| System calibration | 500,000 | | |

#### Additional Information on Production Activity Drivers

- **Grinding:** 13,000 machine hours
- **Polishing:** 13,000 machine hours
- **Product modification:** 5,100 engineering hours
- **Providing power:** 17,000 direct labor hours
- **System calibration:** 400 batches

### Job Details

| | Job 3175 | Job 4286 |
|--------------------|----------|----------|
| Number of units | 200 units| 2,500 units|
| Machine hours | 550 MH | 5,500 MH |
| Engineering hours | 26 eng. hours | 32 eng. hours |
| Batches | 30 batches | 90 batches |
| Direct labor hours | 500 DLH | 4,375 DLH |

This information is relevant for understanding the allocation of overhead costs in the manufacturing process and is part of a broader analysis of the efficiency and cost-effectiveness of production activities.

**Educational Transcription:**

**Data Overview:**

- **Providing Power:**
- 17,000 direct labor hours

- **System Calibration:**
- 400 batches

**Job Details:**

- **Job 3175:**
- Number of units: 200 units
- Machine hours: 550 MH
- Engineering hours: 26 engineering hours
- Batches: 30 batches
- Direct labor hours: 500 DLH

- **Job 4286:**
- Number of units: 2,500 units
- Machine hours: 5,500 MH
- Engineering hours: 32 engineering hours
- Batches: 90 batches
- Direct labor hours: 4,375 DLH

**Task Requirement:**

1. **Classify each activity as unit level, batch level, product level, or facility level:**
- Grinding: [ ]
- Polishing: [ ]
- Product modification: [ ]
- Providing power: [ ]
- System calibration: [ ]

**Graph/Diagram Explanation:**

The document presents a table outlining data concerning two jobs (Job 3175 and Job 4286) with specifics on the number of units, machine hours, engineering hours, batches, and direct labor hours. Each job comprises different quantities, highlighting the scale of production and resource allocation.

Below the job data, a classification activity table lists several production-related tasks that need to be categorized by their level of impact (unit, batch, product, or facility) for business process analysis.

Expert Solution

Step 1

Unit-level activity: Unit‐level activities occur every time a service is performed or a product is made. The costs of direct materials, direct labor, and machine maintenance are examples of unit‐level activities.

Product-level activity: These activities relate to specific products and must be carried out regardless of how many batches or units of product are produced or sold. For example, designing a product, advertising a product, and maintaining a product manager and staff are all product-level activities.

Batch-level activity: Batch‐level activities are costs incurred every time a group (batch) of units is produced or a series of steps are performed. Purchase orders, machine setup, and quality tests are examples of batch‐level activities.

Facility-level activities: Facility support activities are necessary for development and production to take place. These costs are administrative in nature and include building depreciation, property taxes, plant security, insurance, accounting, outside landscape and maintenance, and plant management's and support staff's salaries.