Purdy Manufacturing produces flat-screen computer monitors. Consider the following selected costs that arose during the current year:
1. Direct materials used: $4,440,000
2. Plant rent, utilities, and taxes: $1,300,000
3. New technology design engineering: $2,030,000
4. Materials receiving: $418,000
5. Manufacturing-run/set-up charges: $215,000
6. Equipment depreciation: $92,000
7. General management salaries: $1,560,000
Required:
A. Briefly distinguish between batch-level and facility-level activities.
B. Determine the cost of the firm's unit-level, batch-level, product-sustaining, and facility-level activities.

Question

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The Answer of Purdy Manufacturing produces flat-screen computer monitors. Consider the following selected costs that arose during the current year:
1. Direct materials used: $4,440,000
2. Plant rent, utilities, and taxes: $1,300,000
3. New technology design engineering: $2,030,000
4. Materials receiving: $418,000
5. Manufacturing-run/set-up charges: $215,000
6. Equipment depreciation: $92,000
7. General management salaries: $1,560,000
Required:
A. Briefly distinguish between batch-level and facility-level activities.
B. Determine the cost of the firm's unit-level, batch-level, product-sustaining, and facility-level activities.

Purdy Manufacturing Produces Flat-Screen Computer Monitors