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Unformatted text preview: achinerelated overhead costs (depreciation and maintenance) of $1,200,000 are output unitlevel costs because they change with the number of units produced. g. Plant management, plant rent, and insurance costs of $950,000 are facilit ysustaining costs because the costs of these act ivit ies cannot be traced to individual products or services but support the organizat ion as a who le. 53 2. The co mplex boom box made in many batches will use significantly more batchlevel overhead resources compared to the simple boom box that is made in a few batches. In addit ion, the co mplex boom box will use more productsustaining overhead resources because it is complex. Because each boom box requires the same amount of machinehours, both the simple and the co mplex boom box will be allocated the same amount of overhead costs per boom box if Teledor uses only machinehours to allocate overhead costs to boom boxes. As a result, the complex boom box will be undercosted (it consumes a relat ively high level of resources but is reported to have a relat ively low cost) and...
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- Spring '10
- Cost Accounting