costacctg13_sm_ch05

Batchlevelcosts c setupcosts385000

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Unformatted text preview: ngineering changes) that its customers perceive as not adding value. c. Teledor management can ident ify and evaluate new designs to improve performance by analyzing how product and process designs affect activit ies and costs. d. Teledor can use it s ABC systems and cost hierarchy informat ion to plan and manage activit ies. What activit ies should be performed in the period and at what cost? 5­17 (25 min.) ABC, cost hierarchy, service. 1. Output unit­level costs a. Direct­labor costs, $243,000 b. Equipment­related costs (rent, maintenance, energy, and so on), $400,000 These costs are output unit­level costs because they are incurred on each unit of materials tested, that is, for every hour of testing. Batch­level costs c. Setup costs, $385,000 These costs are batch­level costs because they are incurred each time a batch of materials is set up for either HT or ST, regardless o f the number of hours for which the tests are subsequent ly run. Service­sustaining costs d. Costs of designing tests, $252,000. These costs are service­sustaining costs because they are incurred to design the HT and ST tests, regardless o f the number of batches tested or the number...
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This note was uploaded on 10/11/2010 for the course ACCT 321 taught by Professor Cole during the Spring '10 term at University of Miami.

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