Greetings,
I need to know whether the following are direct, indirect, or unallocated using a traditional and ABC cost system. If the answer is indirect cost I need to know one appropriate cost allocation.
Market research study conducted by marketing staff to assess demand for potential new product / related cost is salaries of market research staff:
Traditional: ABC:
Production scheduling / related cost is salaries of production scheduling managers:
Traditional: ABC:
Purchasing materials and parts to be used in products / related cost is salaries of purchasing agents:
Traditional: ABC:
Order processing of customer orders / related cost is salaries of order staff:
Traditional: ABC:
Preparing cost analyses / related cost is cost acct salary:
Traditional: ABC:
Designing a new product / related cost is salaries of design engineers that are fully dedicated to the new product:
Traditional: ABC:
Managing overall operations / related cost is salary of executive of company:
Traditional: ABC:
Setting up for a production run / related cost is mechanic wages:
Traditional: ABC:
Purchasing materials and parts to be used in products / related cost is materials and parts cost:
Traditional: ABC:
Shipping sold products to customers / related cost is fuel on company’s fleet of trucks:
Traditional: ABC: