PROBLEM 4

Levels of cost drivers. Each of the following is a potential activity driver. Identify the most likely level of each driver with U for a unit-level driver,B for a batch-level diver and P for a product-level driver.

(a)Loads of materials moved

(b)Materials cost

(c)Pounds of finished product produced

(d)Shipments to customers (where no finished goods inventory is maintained

(e)Number of part numbers used

(f)Machine hours

(g)Purchase orders issued (where large materials inventories are maintained

(h)Direct costs

(i)Pieces inspected (where output is 100% inspected)

(j)Pieces inspected (where only the first piece is inspected after each setup)

Problem 5. Levels of cost drivers.

Each of the following is a potential activity driver. Identify most likely level of each driver with U for a unit-level driver, B for a batch-level driver and P for a product-level driver.

(a)Pounds of materials used

(b)Work orders

(c)Direct labor hours

(d)Total value added

(e)Units produced

(f)Machine setups

(g)Design changes

(h)Marketing promotions