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Defining cost for different activities

Green Glider Corporation makes golf carts that it sells directly to golf courses throughout the world. Several basic models are available, which are modified to suit the needs of each particular golf course. A golf course located in the Pacific Northwest, for example, would typically specify that its golf carts come equipped with retractable rain-proof covers. In addition, each customer (i.e., golf course) customizes its golf carts with its own color scheme and logo. The company typically makes all of the golf carts for a customer before starting work on the nest customer's golf carts. Below are listed a number of activities and costs a Green Glidr Corporation:

a. The purchasing department orders the specific color of paint specified by the customer from the company's supplier.

b. A steering wheel is installed in a golf cart.

c. An outside attorney draws up a new generic sales contract for the company limiting green glider's liability in case of accidents that involve its golf carts.

d. The company's paint shop makes a stencil for a customer's logo.

e. A sales representative visits an old customer to check on how the company's golf carts are working out and to try to make a new sale.

f. The accounts receivable department prepares the bill for a completed order.

g. Electricity is used to heat and light the factory and the administrative offices

h. A golf cart is painted.

I. The company's engineer modifies the design of a model to eliminate a potential safety problem.

J. The marketing department has a catalog printed and then mails copies to golf course managers.

k. Completed golf cars are individually tested on the company's test track.

L. A new model golf cart is shipped to the leading golfing trade magazine to be evaluated for the magazine's annual rating of golf carts

Classify each of the costs or activities above as unit-level, batch-level, product-level, customer level,or organization-sustaining. In this case, customers are golf courses, products are models of the golf cart, a batch is a specific order from a customer, and units are individual golf carts.

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Managerial Accounting/ Cost hierarchy
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Green Glider Corporation makes golf carts that it sells directly to golf courses throughout the world. Several basic models are available, which are modified to suit the needs of each particular golf course. A golf course located in the Pacific Northwest, for example, would typically specify that its golf carts come equipped with retractable rain-proof covers. In addition, each customer (i.e., golf course) customizes its golf carts with its own color scheme and logo. The company typically makes all of the golf carts for a customer ...

Solution Summary

This posting identifies cost for different activities for Green Glider Corporation

$2.19