Cost Hierarchy CD Express, Inc., provides CD duplicating services for its customers. An order from a customer can he for a single copy or for thousands of copies. Most jobs are broken down into batches to allow smaller jobs, with higher priorities, to have access to the machines. A number of activities carried out at CD Express are listed below. a. Sales representatives’ periodic visits to customers to keep them informed about the services provided by CD Express. b. Ordering labels from the printer for a particular CD. c. Setting up the CD duplicating machine to make copies from a particular master CD. d. Loading the automatic labeling machine with labels for a particular CD. e. Visually inspecting CDs and placing them by hand into protective plastic cases prior to shipping. f. Preparation of the shipping documents for the order. g. Periodic maintenance of equipment. h. Lighting and heating the company’s production facility. i. Preparation of quarterly financial reports. Required: Classify each of the activities above as either a unit-level, batch-level, product-level, customer-level, or organization-sustaining activity. An order to duplicate a particular CD is a product-level activity. Assume the order is large enough that it must be broken down into batches.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Cost Hierarchy
CD Express, Inc., provides CD duplicating services for its customers. An order from a customer can he for a single copy or for thousands of copies. Most jobs are broken down into batches to allow smaller jobs, with higher priorities, to have access to the machines.
A number of activities carried out at CD Express are listed below.
a. Sales representatives’ periodic visits to customers to keep them informed about the services provided by CD Express.
b. Ordering labels from the printer for a particular CD.
c. Setting up the CD duplicating machine to make copies from a particular master CD.
d. Loading the automatic labeling machine with labels for a particular CD.
e. Visually inspecting CDs and placing them by hand into protective plastic cases prior to shipping.
f. Preparation of the shipping documents for the order.
g. Periodic maintenance of equipment.
h. Lighting and heating the company’s production facility.
i. Preparation of quarterly financial reports.
Required:
Classify each of the activities above as either a unit-level, batch-level, product-level, customer-level, or organization-sustaining activity. An order to duplicate a particular CD is a product-level activity. Assume the order is large enough that it must be broken down into batches.
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