costacctg13_sm_ch05

C costof indirect materials o f

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Unformatted text preview: 00,000 support direct manufacturing labor and are output unit­level costs. Direct manufacturing labor generally increases wit h output units, and so will the indirect costs to support it. b. Batch­level costs are costs of act ivit ies that are related to a group of units o f a product rather than each individual unit o f a product. Purchase order­related costs (including costs of receiving materials and paying suppliers) of $600,000 relate to a group of units of product and are batch­level costs. c. Cost of indirect materials o f $350,000 generally changes wit h labor hours or machine hours which are unit­level costs. Therefore, indirect material costs are output unit­ level costs. d. Setup costs of $700,000 are batch­level costs because they relate to a group of units of product produced after the machines are set up. e. Costs of designing processes, drawing process charts, and making engineering changes for individual products, $900,000, are product­sustaining because they relate to the costs of activit ies undertaken to support individual products regardless of the number of unit s or batches in which the product is produced. f. M...
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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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