Tanner Manufacturing is developing an activity-based costing system to improve overhead cost allocation. One of the first steps in developing the system is to classify the costs of performing production activities into activity cost pools.
Classify the cost of each activity in the following list into unit-, batch-, product-, or facility-level cost pools:

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24-11-2022
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Tanner Manufacturing is developing an activity-based costing system to improve overhead cost allocation. One of the first steps in developing the system is to classify the costs of performing production activities into activity cost pools.
Classify the cost of each activity in the following list into unit-, batch-, product-, or facility-level cost pools:

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AyushiJain10 AyushiJain10 · Answer 1 · 2022-12-02T08:46:56+01:00

The costs of performing production activities into activity cost pool is Plant security Facility

Product Wages of employees transporting units of labor between workstations

Unit —- Ordering supplies for a certain sort of product —-Factory-wide electricity unit

batch --- A manager in charge of a product line's salary at a facility Commissions on labeling and Packaging Unit

Product or facility level: Product Supply Unit Engineering Product Design

Activity based costing :

Activity-based costing (ABC) is a way of allocating overhead and indirect expenses to products and services, such as wages and utilities. The ABC cost accounting system is built on activities, which are defined as any occurrence, unit of work, or job that has a clear aim. Activity-based costing is a method of costing that detects activities in an organization and allocates the cost of each activity to all products and services based on their actual consumption. As a result, as compared to traditional costing, this approach allocates greater indirect costs to direct expenses.

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