Funz Company, which produces wooden toys, is about to adopt a lean operating environment. In anticipation of the change, Letty Hernandez, Funz's controller, prepared the following list of costs for December:

Required
1. Identify each cost as direct or indirect, assuming that it was incurred in a traditional manufacturing setting.
2. Identify each cost as direct or indirect, assuming that it was incurred in a lean environment.
3. Assume that the costs incurred in the lean environment are for a work cell that completed 1,250 toy cars in December. Compute the total direct cost and the direct cost per unit for the carsproduced.

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Wood S1,200 Insurance -plant S 324 4,000 2,700 1,250 1,740 2,686 254 58 Repairs and maintenance 198 2,654 32 President's salary 54 Engineering la Small tools Depreciation-plant Depreciation-machinery 275 Buildin Direct labor Indirect labor Purchased parts Mas handling 450 Utilities 2,675 Supervision 890 Operating supplies 74 Employee benefits