CASE 5A -- GLASER HEALTH PRODUCTS Glaser Health Products of Ranier Falls, Georgi

Question

CASE 5A -- GLASER HEALTH PRODUCTS
                    Glaser Health Products of Ranier Falls, Georgia, is organized functionally into three divisions: Operations, Sales, and Administrative. Purchasing, receiving,                    materials and production control, manufacturing, factory personnel, inventory stores, and shipping activities are under the control of the vice-president for                    operations, George Gottlieb. Advertising, market research, and sales are the responsibility of the vice- president for sales, Jake Bogan. Accounting,                    budgeting, the firm's computer center, and general office management are delegated to the corporate controller (Administrative), Charlie Kaplan. The following                    cost categories are found in the company as a whole:
                    (a) Depreciation on factory equipment. (b) Depreciation on office equipment. (c) Depreciation on factory building. (d) Advertising manager's salary. (e)                    Assembly foreman's salary. (f) Salespersons' salaries. (g) Salespersons' travel expenses. (h) Supplies for the Machining Department. (i) Advertising supplies                    used. (j) Electricity for the Assembly Department. (k) Lost materials (scrap) in a Machining Department. (l) Direct labor in the Assembly Department. (m)                    Supplies for the sales office. (n) Sales commissions. (o) Packing supplies. (p) Cost of hiring new employees. (q) Payroll fringe benefits for workers in the                    Shipping Department. (r) Supplies for Production Scheduling. (s) Cost of repairing parts improperly manufactured in the Machining Department. (t) Paint for the                    Assembly Department. (u) Heat, light, and power for the factory. (v) Leasing of computer equipment for the Accounting Department.
                    Required:  1. Glaser Health Products is interested in using activity-based costing to identify as many costs as                    possible with the products. These costs will be used for planning and control decisions rather than for inventory valuation. The controller decided that all                    operation costs will be related to products but only those sales and administrative costs that are classified as unit-level, batch-level, or product-level                    costs
                    should be related to products. Using preliminary stage cost drivers, explain how individual items of costs will be traced to activity groupings. 2. Using                    primary stage cost drivers, show how the costs should be related to products. 3. Explain why it is necessary to use preliminary stage and primary stage cost                    drivers.                 

                     include refrerences and AND SHOW ALL WORK

Explanation / Answer

Operations
(a) depreciation and office eqipments
(c) Depreciation on factory building.
(e) Assembly foreman's salary.
(h) Supplies for the machining department
(j) Electricity for the Assembly Department.
(k) Lost materials (scrap) in a Machining Department.
(l) Direct labor in the Assembly Department.
(o) Packing supplies (I include this in the shipping dept.)
(r) Supplies for Production Scheduling.
(s) Cost of repairing parts improperly manufactured in the Machining Department.
(t) Paint for the Assembly Department.
(u) Heat, light, and power for the factory.
(q) Payroll fringe benefits for workers in the Shipping Department.

Sales
(d) Advertising manager's salary.
(f) Salespersons' salaries.
(g) Salespersons' travel expenses.
(i) Advertising supplies used.
(m) Supplies for the sales office.
(n) Sales commissions

Administrative
(b) Depreciation on office equipment.
(p) Cost of hiring new employees.
(v) Leasing of computer equipment for the Accounting Department.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.