Ok. I need help on this assignment: I feel very lost on what they are wanting fo
ID: 2716972 • Letter: O
Question
Ok. I need help on this assignment: I feel very lost on what they are wanting for this assignment. Please see below:
For Questions 1 through 3, create a chart to classify and identify a cost driver for each of the costs provided in the text. The chart should be included as an appendix to the written report. Explanations of the classifications and identifications within the chart should be included within the written report, supported by references to the appendix.
Questions 4 through 6 should be addressed in fully developed explanations/instructions as part of your written report. The written analysis should be supported by at least three scholarly sources, excluding the textbook.
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 vicepresident 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. Identify each of the costs with the appropriate division: Operations, Sales, Administrative.
2. Identify each of the costs with one of the following:
(a) Unit-level activities.
(c) Product-level activities.
(b) Batch-level activities.
(d) Facility-level activities.
Organize these classifications by division: Operations, Sales, Administrative.
3. Specify an appropriate cost driver for tracing costs associated with the various levels of activities to the next cost objective or products, whichever is appropriate.
4. 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.
5. Using primary stage cost drivers, show how the costs should be related to products.
6. Explain why it is necessary to use preliminary stage and primary stage cost drivers.
Explanation / Answer
Part 1
Operations
(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
Part 2
Part 3
Unit – Level Activities
Number of units Produced
Number of Units Scrapped
Machine Hours
Direct Labor Hours
Batch – Level Activities
Number of Setups
Number of Orders Processed
Number of Batches
Product – Level Activities
Number of Parts
Number of Products
Direct Labor Hours
Number of Purchasing and Ordering Hours
Facility – Level Activities
Number of Employees
Labor Hours
Number of Units Produced
Depreciation on factory equipment. Unit-level activities. (b) Depreciation on office equipment. Facility-level activities. (c) Depreciation on factory building. Unit-level activities. (d) Advertising manager's salary. Product-level activities. (e) Assembly foreman's salary. Unit-level activities. (f) Salespersons' salaries. Product-level activities. (g) Salespersons' travel expenses. Product-level activities. (h) Supplies for the Machining Department. Unit-level activities. (i) Advertising supplies used. Product-level activities. (j) Electricity for the Assembly Department. Unit-level activities. (k) Lost materials (scrap) in a Machining Department. Unit-level activities. (l) Direct labor in the Assembly Department. Unit-level activities. (m) Supplies for the sales office. Product-level activities. (n) Sales commissions Product-level activities. (o) Packing supplies (I include this in the shipping dept.) Unit-level activities. (p) Cost of hiring new employees. Facility-level activities. (q) Payroll fringe benefits for workers in the Shipping Department. Unit-level activities. (r) Supplies for Production Scheduling. Unit-level activities. (s) Cost of repairing parts improperly manufactured in the Machining Department. Unit-level activities. (t) Paint for the Assembly Department. Unit-level activities. (u) Heat, light, and power for the factory. Unit-level activities. (v) Leasing of computer equipment for the Accounting Department Facility-level activities.Related Questions
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