Juneau Company - Unit Level, Batch Level, Product Level, Facility Level

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Juneau Company manufactures a variety of products in a single facility. Consultants hired by the company to do an activity-based costing analysis have identified the following activities carried out in the company on a routine basis:

Required:

Classify each of the above activities as a unit-level, batch-level, product-level, or facility-level activity. For each of the above activities, suggest an activity measure that could be used to allocate its costs to products.

 

	Activity	Level	Possible Activity Measures
a.	Machines are set up between batches of different products.	(Click to select) Facility Unit Batch or Unit Facility or Product Batch Product	(Click to select) Number of production orders Number of units inspected; Inspection time Engineering time Number of purchase orders Arbitrary Number of units processed; Machine-hours Number of setups; Setup time Number of material moves
b.	The company's grounds crew maintains planted areas surrounding the factory.	(Click to select) Batch Unit Product Facility or Product Facility Batch or Unit	(Click to select) Number of setups; Setup time Number of units processed; Machine-hours Number of units inspected; Inspection time Number of purchase orders Number of production orders Arbitrary Engineering time Number of material moves
c.	A percentage of all completed goods are inspected on a random basis.	(Click to select) Batch Unit Facility Facility or Product Product Batch or Unit	(Click to select) Engineering time Number of purchase orders Number of units inspected; Inspection time Number of material moves Number of units processed; Machine-hours Number of setups; Setup time Arbitrary Number of production orders
d.	Milling machines are used to make components for products.	(Click to select) Batch Facility or Product Batch or Unit Unit Facility Product	(Click to select) Number of production orders Number of material moves Engineering time Number of units processed; Machine-hours Number of units inspected; Inspection time Number of purchase orders Number of setups; Setup time Arbitrary
e.	Employees are trained in general procedures.	(Click to select) Unit Product Batch Batch or Unit Facility Facility or Product	(Click to select) Arbitrary Number of material moves Number of purchase orders Number of units processed; Machine-hours Number of units inspected; Inspection time Number of production orders Engineering time Number of setups; Setup time
f.	Purchase orders are issued for materials required in production.	(Click to select) Facility Unit Product Facility or Product Batch Batch or Unit	(Click to select) Number of setups; Setup time Number of material moves Number of purchase orders Engineering time Number of units processed; Machine-hours Number of units inspected; Inspection time Number of production orders Arbitrary
g.	The maintenance crew does routine periodic maintenance on general-purpose equipment.	(Click to select) Facility Product Batch or Unit Batch Facility or Product Unit	(Click to select) Engineering time Arbitrary Number of units inspected; Inspection time Number of production orders Number of material moves Number of units processed; Machine-hours Number of purchase orders Number of setups; Setup time
h.	The plant controller prepares periodic accounting reports.	(Click to select) Unit Batch or Unit Facility Batch Product Facility or Product	(Click to select) Number of purchase orders Number of production orders Number of setups; Setup time Number of units processed; Machine-hours Number of units inspected; Inspection time Number of material moves Arbitrary Engineering time
i.	Material is received on the receiving dock and moved to the production area.	(Click to select) Product Facility Batch Batch or Unit Unit Facility or Product	(Click to select) Engineering time Number of production orders Number of setups; Setup time Number of units processed; Machine-hours Arbitrary Number of material moves Number of purchase orders Number of units inspected; Inspection time
j.	The engineering department makes modifications in the designs of products.	(Click to select) Unit Batch Facility or Product Batch or Unit Product Facility	(Click to select) Number of setups; Setup time Number of units inspected; Inspection time Number of production orders Number of units processed; Machine-hours Number of purchase orders Engineering time Arbitrary Number of material moves
k.	The human resources department screens and hires new employees.	(Click to select) Facility or Product Batch Product Unit Facility Batch or Unit	(Click to select) Number of units processed; Machine-hours Engineering time Number of production orders Number of units inspected; Inspection time Arbitrary Number of purchase orders Number of material moves Number of setups; Setup time
l.	Production orders are issued for jobs.	(Click to select) Facility Product Unit Facility or Product Batch Batch or Unit	(Click to select) Number of units processed; Machine-hours Number of setups; Setup time Number of units inspected; Inspection time Engineering time Number of material moves Number of production orders Arbitrary Number of purchase orders

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Worksheet

Difficulty: Basic

Learning Objective: 03-1