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750 words
Lavish Lamps produces high-quality lighting fixtures in its manufacturing plant. The fixtures are designed and manufactured according to the customer’s specifications and are therefore made-to-order. The plant manager has provided you with the following list of key activities within the plant:
- Product design
- Production scheduling
- Purchasing department
- Receiving department
- Machine set-up
- Quality control
- Plant security
- Customer credit check
- Machine operation
- Maintenance
Required:
For each of these activities:
- Identify a cost object and a cost driver.
- How would you recommend recording each of these costs?
- How should these costs be allocated to lighting fixtures?
