Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 11E
Nizam Company produces speaker cabinets. Recently, Nizam switched from a traditional departmental assembly line system to a manufacturing cell in order to 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 assigned to the cell:
- 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
- i. Ordering costs for materials used in production
- j. The salary of the industrial engineer (she spends about 20 percent of her time on work for the cell)
- k. Cost of maintaining plant and grounds
- l. Cost of plant’s personnel office
- m. Depreciation on the plant
- n. Plant receptionist’s salary and benefits
Required:
Identify which cost assignment method would likely be used to assign the costs of each of the preceding activities to the cabinet manufacturing cell: direct tracing, driver tracing, or allocation. When driver tracing is selected, identify a potential activity driver that could be used for the tracing.
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Nizam Company produces speaker cabinets. Recently, Nizam switched from a traditional
departmental assembly line system to a manufacturing cell in order to produce the cabinets. Sup-pose that the cabinet manufacturing cell is the cost object. Assume that all or a portion of the
following costs must be assigned to the cell:a. Depreciation on electric saws, sanders, and drills used to produce the cabinetsb. Power to heat and cool the plant in which the cell is locatedc. Salary of cell supervisord. Wood used to produce the cabinet housingse. Maintenance for the cell’s equipment (provided by the maintenance department)f. Labor used to cut the wood and to assemble the cabinetsg. Replacement sanding beltsh. Cost of janitorial services for the planti. Ordering costs for materials used in productionj. The salary of the industrial engineer (she spends about 20 percent of her time on work forthe cell)k. Cost of maintaining plant and grounds
l. Cost of plant’s personnel officem. Depreciation on…
Hummer Company uses manufacturing cells to produce its products (a cell is a manufacturingunit dedicated to the production of subassemblies or products). One manufacturing cell produces small motors for lawn mowers. Suppose that the motor manufacturing cell is the costobject. Assume that all or a portion of the following costs must be assigned to the cell.a. Salary of cell supervisorb. Power to heat and cool the plant in which the cell is locatedc. Materials used to produce the motorsd. Maintenance for the cell’s equipment (provided by the maintenance department)e. Labor used to produce motorsf. Cafeteria that services the plant’s employeesg. Depreciation on the planth. Depreciation on equipment used to produce the motorsi. Ordering costs for materials used in productionj. Engineering support (provided by the engineering department)k. Cost of maintaining the plant and groundsl. Cost of the plant’s personnel officem. Property tax on the plant and landRequired:Classify each of the costs…
Hummer Company uses manufacturing cells to produce its products (a cell is a manufacturing unit dedicated to the production of subassemblies or products). One manufacturing cell produces small motors for lawn mowers. Suppose that the motor manufacturing cell is the cost object. Assume that all or a portion of the following costs must be assigned to the cell.
Required:
Classify each of the costs as a direct cost or an indirect cost to the motor manufacturing cell.
a.
Salary of cell supervisor
b.
Power to heat and cool the plant in which the cell is located
c.
Materials used to produce the motors
d.
Maintenance for the cell's equipment (provided by the maintenance department)
e.
Labor used to produce motors
f.
Cafeteria that services the plant's employees
g.
Depreciation on the plant
h.
Depreciation on equipment used to produce the motors
i.
Ordering costs for materials used in…
Chapter 2 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 2 - What is an accounting information system?Ch. 2 - What is the difference between a financial...Ch. 2 - What are the objectives of a cost management...Ch. 2 - Define and explain the two major subsystems of the...Ch. 2 - What is a cost object? Give some examples.Ch. 2 - Prob. 6DQCh. 2 - What is a direct cost? An indirect cost?Ch. 2 - Prob. 8DQCh. 2 - What is allocation?Ch. 2 - Explain how driver tracing works.
Ch. 2 - What is a tangible product?Ch. 2 - Prob. 12DQCh. 2 - Give three examples of product cost definitions....Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Pietro Frozen Foods, Inc., produces frozen pizzas....Ch. 2 - For next year, Pietro predicts that 50,000 units...Ch. 2 - Pietro expects to produce 50,000 units and sell...Ch. 2 - Refer to Cornerstone Exercises 2.2 and 2.3. Next...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Prob. 9ECh. 2 - The following items are associated with a cost...Ch. 2 - Nizam Company produces speaker cabinets. Recently,...Ch. 2 - Three possible product cost definitions were...Ch. 2 - Wyandotte Company provided the following...Ch. 2 - For each of the following independent situations,...Ch. 2 - LeMans Company produces specialty papers at its...Ch. 2 - Kildeer Company makes easels for artists. During...Ch. 2 - Anglin Company, a manufacturing firm, has supplied...Ch. 2 - Lakeesha Barnett owns and operates a package...Ch. 2 - Millennium Pharmaceuticals, Inc. (MPI), designs...Ch. 2 - Jazon Manufacturing produces two different models...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Orinder Company provided the following information...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - The ability to assign a cost directly to a cost...Ch. 2 - Selected information concerning the operations of...Ch. 2 - Brody Company makes industrial cleaning solvents....Ch. 2 - Wright Plastic Products is a small company that...Ch. 2 - The following items are associated with a...Ch. 2 - The actions listed next are associated with either...Ch. 2 - Spencer Company produced 200,000 cases of sports...Ch. 2 - Prob. 33PCh. 2 - Mason, Durant, and Westbrook (MDW) is a tax...Ch. 2 - Orman Company produces neon-colored covers for...Ch. 2 - High drug costs are often in the news. Consumer...
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