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Direct, Indirect, and Unallocated Costs Listed below are several…

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Direct, Indirect, and Unallocated Costs Listed...
Direct, Indirect, and Unallocated Costs
Listed below are several activities and related costs that have been observed at Santana Company, a
manufacturing company. The company makes a variety of products and currently uses a traditional
costing system that allocates only production overhead based on direct-labor hours. It is implementing
an ABC system for the design, production, and distribution functions of its value chain. You have been
asked to complete the table below by indicating for each activity whether the related cost is direct,
indirect, or unallocated. For each indirect cost, indicate one appropriate cost driver (more than one
cost driver may be appropriate). The first two items have been completed for you.
Activity Related Cost Traditional ABC
Supervising production Supervisor salaries Indirect Indirect
(direct-labor (people
hours) supervised)
Designing a prototype Depreciation of Unallocated Indirect (number
for new product computers of parts)
Setting up for Mechanic wages
a production run
Purchasing materials Materials and
and parts to be used parts cost
in products
Shipping sold products Fuel used on company’s
to customers (distributors) fleet of trucks
Market research study Salaries of market
conducted by research staff
marketing staff to
assess demand for
potential new product
Production scheduling Salaries of production
scheduling managers
Purchasing materials Salaries of purchasing
and parts to be agents
used in products
Order processing of Salaries of order
customer orders processing staff
Preparing cost analyses Cost accountant salary
Designing a new product Salaries of design
engineers that are
fully dedicated to
this new product
Managing overall operations Salary of executive
of company
Submitted: 8 years ago.Category: Business and Finance Homework
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Answered in 10 minutes by:
6/11/2010
Business Tutor: Steve, MBA replied 8 years ago
Steve
Steve, MBA
Category: Business and Finance Homework
Satisfied Customers: 25,940
Experience: MBA
Verified

Hi,

Are you able to repost this in table form? It is hard to read and I think some of the items got jumbled.

Thanks,

Steve

Ask Your Own Business and Finance Homework Question
Customer reply replied 8 years ago

I am sorry but I can't

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