Required Information Problem 17-3A Applying activity-based costing LO P1, P3, A1

Question

Required Information Problem 17-3A Applying activity-based costing LO P1, P3, A1, A2, C3 The following information applies to the questions displayed below.j Craft Pro Machining produces machine tools for the construction industry. The following detsils about overhead costs were taken from its company records. Production Activity Grinding8 Polishing Product nodification Providing power System calibration 155,e80 218,82e 438,e2e Additional information on the drivers for its production activities follows. Grinding8 Polishing Product nodification Providing power System calibration 28,82e machine hours 2,180 cngineering hours 17,880 direct labor hours 1,82e batches ob 3175 Job 4286 Number of units Machine hours Engineering hours Batche5 32 CnB cng s batchcs 15 batchcs Direct labor hours 3,870 DLH Problem 17-3A Part 1 Required: 1. Classify each activity as unit level, bstch level, product level, or facility level. Grinding Polishing Providing power System calibration

Explanation / Answer

Classification of activities Grinding Unit level Unitlevel activities occur every time a service is performed or a product is made. Polishing Unit level Product modification Product level These activities relate to specific products and must be carried out regardless of how many batches or units of product are produced or sold. Providing power Facility level Facility-level activities are those actions taken to maintain the general operations of a business. System calibration Batch level These are costs incurred every time a group (batch) of units is produced or a series of steps is performed.

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