Hello, everything is correct except for the highlighted line. The cost driver is correct but I can't get the right category for it. I've tried Unit, Product, Product or Unit and none of those are correct. Please help! ActivitiesCategoryPotential Cost DriverFacilityNumber of Square FeetNumber of SetupsFactory utilitiesMachine setupsBatchResearch and development for a new productProductResearch and Development HoursSanding rough edges of the productUnitMachine HoursPackaging the product for shipmentProduct or UnitNumber of UnitsDeveloping new packaging for a new product lineProductNumber of Development HoursFacilityUnitMaintenance on equipmentMachine HoursAssembling the product's component partsDirect Labor HoursMaterials handling costsUnit or BatchNumber of Material MovesQuality control testingUnit or BatchNumber of Quality Inspections

Answered: Activities Category Potential Cost…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 1TIF: Ethics in Action The controller of Tri Con Global Systems Inc. has developed a new costing system...

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Hello, everything is correct except for the highlighted line. The cost driver is correct but I can't get the right category for it.

I've tried Unit, Product, Product or Unit and none of those are correct.

Please help!

Activities
Category
Potential Cost Driver
Facility
Number of Square Feet
Number of Setups
Factory utilities
Machine setups
Batch
Research and development for a new product
Product
Research and Development Hours
Sanding rough edges of the product
Unit
Machine Hours
Packaging the product for shipment
Product or Unit
Number of Units
Developing new packaging for a new product line
Product
Number of Development Hours
Facility
Unit
Maintenance on equipment
Machine Hours
Assembling the product's component parts
Direct Labor Hours
Materials handling costs
Unit or Batch
Number of Material Moves
Quality control testing
Unit or Batch
Number of Quality Inspections

Expert Solution

Step 1 General Introduction

Activity based costing is an accounting method that allocates manufacturing overheads based on the associated variables of the expense incurred. It influences the cost of labor, maintenance and other variable costs

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