Management and Organizational Studies 3199Y Lecture Notes - Lecture 7: Activity-Based Costing, Preventive Maintenance, Deutsche Luft Hansa
7 Jun 2017
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Preventive maintenance is performed on general- purpose production equip- ment. Reminder notices are sent to customers who are late in making payments. Purchase orders are issued for materials to be used in production. Batch-level: modifications are made to product designs. New employees are hired by the personnel office. Number of purchase orders; time spent preparing pur- chase orders. Number of modifications made; time spent making modifications. Not applicable; these costs probably should not be as- signed to products or cus- tomers: machine settings are changed between batches of different products. Parts inventories are main- tained in the storeroom. (each product requires its own unique parts. ) Insurance costs are incurred on the company"s facilities. Number of batch setups; time spent making setups. Number of products; number of parts; time spent main- taining inventories of parts. Not applicable; these costs probably should not be as- signed to products or cus- tomers. Exercise 7-17: the first step is to determine the activity rates:
