might Be uset selling costs. i are as follows E4-8 Wilmington, Inc, manufactures
ID: 2572097 • Letter: M
Question
might Be uset selling costs. i are as follows E4-8 Wilmington, Inc, manufactures five models of kitchen appliances The installing activity-based costing and has identified the following activities Mesa plant. 1. Designing new models. 2. Purchasing raw materials and parts. 3. Storing and managing inventory 4. Receiving and inspecting raw materials and parts. Activity C Sales comm Advertising Advertising 5. Interviewing and hiring new personnel. Catalogs 6. Machine forming sheet steel into appliance parts. Cost of car Credit ano 7. Manually assembling parts into appliances. 8. Training all employees of the company Instruct (a) Com the r cost (b) Bys 9. Insuring all tangible fixed assets. 10. Supervising production. 12. Painting and packaging finished appliances. Having analyzed its Mesa plant operations for purposes of installing activity-based machinery and equipment. Wilmington, Inc. identified its activity cost centers. It now needs to identify relevantacE4-11 cost drivers in order to assign overhead costs to its products. costs i tratio Healt Instructions Using the activities listed above, identify for each activity one or more cost drives tconts might be used to assign overhead to Wilmington's five products. cost repe ado of JExplanation / Answer
SOLUTION:
1. Designing new models:
Solution: Number of design hours and number of new designs
2. Purchasing raw materials and parts:
Solution: Amount of processed orders, type of purchase orders and number of the line items
3. Storing and managing inventory:
Solution: Number of availability of parts in stock, number of the line items and individual parts, cost of inventory.
4. Receiving and inspecting raw materials and parts:
Solution: Number of shipment receiving and inspecting hours, number of boxes; individual parts, cost.
5. Interviewing and hiring new personnel:
Solution: Number of hiring of new employees; type of interviews and value of new interview
6. Machine forming sheet steel into appliance parts:
Solution: Machine hours
7. Manually assembling parts into appliances:
Solution: Employees, direct labor, assembly hours.
8. Training all employees of the company:
Solution: Number of employees; training hours
9. Insuring all tangible fixed assets: Book value of assets
Solution: Assets at book value
10. Supervising production:
Solution: Direct labor hours; supervision hours and number of employees
11. Maintaining and repairing machinery and equipment:
Solution: Number of machines, number of machine hours; and repair and maintenance
12. Painting and packaging finished appliances:
Solution: amount of labels, packing material, finished appliances, and gallons of paint.
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