Stage 1 ABC For Machine Shop: Assigning Costs to Activity
As the chief engineer of a small fabrication shop, Christine Fordrefers to herself as a “jack-of-all-trades.” When an order for anew product comes in, Christine must do the following:
1. Design the product to meet customer requirements.
2. Prepare a bill of materials (a list of materials required toproduce the product).
3. Prepare an operations list (a sequential list of the stepsinvolved in manufacturing the product).
Each time the foundry manufactures a batch of the product,Christine must perform these activities:
1. Schedule the job.
2. Supervise the setup of machines that will work on the job.
3. Inspect
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