Exercise 211 Cost Assignment Methods Nizam Company produces speaker cabinets

Exercise 211 cost assignment methods nizam company

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Exercise 2.11Cost Assignment MethodsNizam Company produces speaker cabinets. Recently, Nizam switched from a traditional departmental assembly line system to a manufacturing cell in orderto produce the cabinets. Suppose that the cabinet manufacturing cell is the cost object. Assume that all or a portion of the following costs must be assignedto the cell:Required:Identify which cost assignment method would likely be used to assign the costs of each of the following activities to the cabinet manufacturing cell: directtracing, driver tracing, or allocation. When driver tracing is selected, identify a potential activity driver that could be used for the tracing. If direct tracing orallocation is selected, choose "no potential driver" from the 2nd column dropdown box.a.Depreciation on electric saws, sanders, and drills used to produce the cabinets b.Power to heat and cool the plant in which the cell is located c.Salary of cell supervisor d.Wood used to produce the cabinet housings e.Maintenance for the cell's equipment (provided by the maintenance department) f.Labor used to cut the wood and to assemble the cabinets g.Replacement sanding belts h.Cost of janitorial services for the plant Allocation no potential driver i. Ordering costs for materials used in production Driver tracing number of orders j. The salary of the industrial engineer (she spends about 20 percent of her time on work for the cell) Driver tracing number of engineering hours k. Cost of maintaining plant and grounds Allocation no potential driver l. Cost of plant's personnel office Driver tracing direct labor hours m. Depreciation on the plant Allocation no potential driver n. Plant receptionist's salary and benefits Allocation no potential driver eBook
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