Question

Stage 1 ABC For Machine Shop: Assigning Costs to Activity
As the chief engineer of a small fabrication shop, Christine Ford refers to herself as a “jack-of-all-trades.” When an order for a new product comes in, Christine must do the following:

1. Design the product to meet customer requirements.
2. Prepare a bill of materials (a list of materials required to produce the product).
3. Prepare an operations list (a sequential list of the steps involved in manufacturing the product).

Each time the foundry manufactures a batch of the product, Christine must perform these activities:
1. Schedule the job.
2. Supervise the setup of machines that will work on the job.
3. Inspect the first unit produced to verify that it meets specifications.

Christine supervises the production employees who perform the actual work on individual units of product. She is also responsible for employee training, ensuring that production facilities are in proper operating condition, and attending professional meetings. Christine's estimates (in percent) of time spent on each of these activities last year are as follows:

Designing product	12%
Preparing bills of materials	7%
Preparing operations lists	10%
Scheduling jobs	16%
Supervising setups	8%
Inspecting first units	6%
Supervising production	22%
Training employees	13%
Maintaining facility	4%
Attending professional meetings	2%
	100%

Assuming Christine Ford’s salary is $85,000 per year, determine the dollar amount of her salary assigned to unit-, batch-, product-, and facility-level activities. (You may need to review Chapter 2 before answering this question.)

	% of Time Spent on Activity	Assignment of Salary
Unit level:
AnswerAttending professional meetingsFacility maintenanceFirst unit inspectionPreparing bills of materialsPreparing operations listsSupervising productionSupervising setup	Answer %
Total	Answer %	$Answer
Batch level:
Job scheduling	Answer %
AnswerAttending professional meetingsFacility maintenancePreparing bills of materialsPreparing operations listsSupervising productionSupervising setup	Answer %
AnswerAttending professional meetingsFacility maintenanceFirst unit inspectionPreparing bills of materialsPreparing operations listsSupervising production	Answer %
Total	Answer %	Answer
Product level:
Product design	Answer %
AnswerAttending professional meetingsFacility maintenanceFirst unit inspectionPreparing bills of materialsSupervising productionSupervising setup	Answer %
AnswerAttending professional meetingsFacility maintenanceFirst unit inspectionPreparing operations listsSupervising productionSupervising setup	Answer %
Total	Answer %	Answer
Facility level:
Employee training	Answer %
AnswerFacility maintenanceFirst unit inspectionPreparing bills of materialsPreparing operations listsSupervising productionSupervising setup	Answer %
AnswerAttending professional meetingsFirst unit inspectionPreparing bills of materialsPreparing operations listsSupervising productionSupervising setup	Answer %
Total	Answer %	Answer
Grand total	Answer %	$Answer

Answer 1