ACCT 223 Lecture Notes - Lecture 4: Total Quality Management, Continual Improvement Process, Lean Thinking

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Focuses on activities and costs of activities. Machine setup, materials handling, forklifts (gas, operators), testing equipment, inspection labor, packaging equipment. Step 2: select an allocation base for each activity. Step 3: compute cost allocation rate for each activity. Step 4: allocate some manufacturing overhead for each activity to the individual jobs that use the activities. Job cost record: direct materials, direct labor, moh. Facility level activity: costs for entire facility. Product level activity: all costs associated with chevy tahoe. Batch level activity: tahoe by color or packages. Classify each of the following costs as either unit-level, batch level, product-level or facility level. Change the prices after identifying the different total cost. Decide to market the higher profitability product. Shift the product mix away from less profitable products. Goal: provide customers with superior products and services. More investment up front to generate savings in the back end of the value chain.

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