Question

Salanes of production labor supervisors: O direct labor hours 0 machine hours O setup hours O number of setups O number of units O number of new product designs Salaries of machine technicians (they repair the machines; on average, machines break down every 500 hours) O direct labor hours O machine hours O setup hours O number of setups O number of units O number of new product designs Salaries of production support staff (they set up the machines before each production batch; each setup for product A requires 10 setup hours, and each setup for product B requires 20 setup hours): O direct labor hours O machine hours O setup hours O number of setups O number of units O number of new product designs Design department costs (they develop new products) O direct labor hours O machine hours O setup hours O number of setups O number of units O number of new product designs Call center costs (they provide technical assistance to customers; on average, 5% of all units sold require some technical assistance): O direct labor hours O machine hours O setup hours O number of setups O number of units O number of new product designs

Answer 1

1. Salaries of production labor supervisor:

Direct labor hours

Brief Explanation: Duties and time contribution of direct labor supervisors depends on the Direct labor hours. Hence, the salaries of direct labor supervisors should be distributed on the basis of direct labor hours.

2. Salaries of Machine technicians

Machine hours

Brief Explanation: As the machine technicians do the repair and maintenance of the machine, and the machine breakdowns depends on machine hours, their salaries should be distributed on the basis of machine hours.

3. Salaries of production support staff.

Setup hours

Brief Explanation: They set up the machines before production run, and it takes different times for different products. Hence, it should be distributed on the basis of set up times.

4. Design department costs.

Number of new product design

Brief Explanation: As it can be easily related with the number of new product designed, it would be appropriate to allocate design department's costs non that basis.

5. Call center costs.

Number of units

Brief Explanation: As the customer assistance services depends on number of units, the respective department's costs should be allocated on the basis of number of units.

** Please feel free to ask me if any more explanations are required. Thank You..!!