United Technologies; Classification of Activities
United Technologies corporation is using activity-based costing in two of its subsidiaries: company and carrier corporation. The following table shows 27 activities and eight accounts identified at Carrier. along with the classification determined by the .ABC project team.17
Name of Activity or Account | Classification by Activity level | |
Acquiring material. | Batch | |
Inspecting incoming materials. | Batch | |
Moving materials. | Batch | |
Planning production | Batch | |
Processing special orders. | Batch | |
Processing supplier in Voices. | Batch | |
Receiving material. | Batch | |
Scheduling production. | Batch | |
Inspecting production processes | Batch | |
Processing purchase orders | Batch | |
Building occupancy. | Facility | |
Depreciation. | Facility | |
General management | Facility | |
Maintaining facilities | Facility | |
Managing the environment. | Facility | |
Assuring quality. | Sustaining | |
Expediting | Sustaining | |
Maintaining tools and dies. | Sustaining | |
Maintaining/improving production processes | Sustaining | |
Managing human resources | Sustaining | |
Managing waste disposal. | Sustaining | |
Processing payroll. | Sustaining | |
Processing production information | Sustaining | |
Providing product cost. | Sustaining | |
Setting manufacturing methods. | Sustaining | |
Supervising production | Sustaining | |
Sustaining accounting. | Sustaining | |
Maintaining production equipment. | Sustaining | |
Direct-labor allowances | Unit | |
Direct-labor fringes. | Unit | |
Utilities (equipment) | Unit | |
Overtime (hourly) | Unit | |
Rework | Unit | |
Shift differential. | Unit | |
Spoilage | Unit |
Required: Choose two activities or accounts from each of the four classifications and explain why you agree or disagree with the ABC project team's classification.
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