Chapter 4, Problem 4.7SE

Classifying costs within the cost hierarchy (Learning Objective 2)

Classify each of the following costs as either unit-level, batch-level, product-level, or facility-level.

1. a. Engineering costs for new product
2. b. Order processing
3. c. Depreciation on factory
4. d. Direct labor
5. e. Shipment of an order to a customer
6. f. Product line manager salary
7. g. Machine setup costs that are incurred whenever a new production order is started
8. h. Patent for new product
9. i. Factory utilities
10. j. Direct materials
11. k. Cost to inspect each product as it is finished
12. l. CEO salary