Dynamic Products, Inc. manufactures a wide variety of products init\'s planet in
ID: 2662255 • Letter: D
Question
Dynamic Products, Inc. manufactures a wide variety of products init's planet in Macon, Georgia. Management has identified thefollowing manufacturing and adminstrative activites.1. Special equipment is used to add a protective finish to avarious products.
2. Purchase order as issued to acquire rawmaterials.
3.Factory managers run training programs in quality control for newemployees.
4.Machine setups are necessary for each batch of goodsproduced.
5. Janitors clean the offices and the planet floor eachevening.
6. Warehouse personnel pull the stock needed for production andmove the materials to the plant floor.7. Receiving clerks inspectincoming materials and prepare receiving reports.
8. Quality control inspectors test each bath of goods before it isstored or shipped.
9.Payroll clerks process the factory workers time cardsand prepare weekly paychecks for distribution.
10. Engineers develop new-product specifications and redesignexisting products as needed.
A. Classify each of the activities listed as unit-level,batch level, product -level, or facility level activity.
B. Identify a cost driver for each of theactivities that could be used to apply costs to dynamicsproducts.
C. For each activity,identify one or ore traceable costs.
D. Explain how the hierarchy provides insights that affect decisionmaking.
Explanation / Answer
Management has identified the following manufacturing andadministrative activities: Facility level activity3. Factorymanagers run training programs in quality control for newemployees-Cost Driver: Trg Cost per employee 5. Janitors clean the offices and the plant floor each evening -Fixed OH 7. Receiving clerks inspect incoming materials and preparereceiving reports - Variable OH: No of Hrs worked for each Unit 9. Payroll clerks process the factory workers' time cards andprepare weekly paychecks for distribution-Fixed OH Product-level1. Special equipment isused to add a protective finish to various products - Var OH perproduct basis 10. Engineers develop new-product specifications and redesignexisting products as needed - Fixed OH R&D Batch-level4. Machine setups arenecessary for each batch of goods produced - Var OH :No of MachineHrs per batch 8. Quality control inspectors test each batch of goods before it isstored or shipped-Var OH- No of Batches Inspected Unit-level2. Purchase orders are issuedto acquire raw materials - VarOH - No of Purc orders for Units. 6. Warehouse personnel pull the stock needed for production andmove the materials to the plant floor - No of Personnel reqd perunit.
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