Requirement 1. Classify each of the costs as output-unit-level, batch-level, output-sustaining, or organisation-sustaining. Explain each answer. Cost Item a. Indirect production labour costs such as supervision that supports direct production labour, $935,000 b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $650,000 Cost of indirect materials, $234,000 C. d. Costs incurred to set up machines each time a different product needs to be produced, $392,000 e. Designing processes, drawing process charts, making ongineering process changes for products, $236,900 Machine-related overhead costs such as depreciation, maintenance, production engineering, $865,000 (These resources relate to the activity of running the machines.) f. . Factory management, rent and insurance, $498,000
Requirement 1. Classify each of the costs as output-unit-level, batch-level, output-sustaining, or organisation-sustaining. Explain each answer. Cost Item a. Indirect production labour costs such as supervision that supports direct production labour, $935,000 b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $650,000 Cost of indirect materials, $234,000 C. d. Costs incurred to set up machines each time a different product needs to be produced, $392,000 e. Designing processes, drawing process charts, making ongineering process changes for products, $236,900 Machine-related overhead costs such as depreciation, maintenance, production engineering, $865,000 (These resources relate to the activity of running the machines.) f. . Factory management, rent and insurance, $498,000
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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