Archambeau Products Company Manufactures Office Furniture

question 179

Essay

Archambeau Products Company manufactures office furniture.Recently,the company decided to develop a formal cost accounting system and classify all costs into three categories.Categorize each of the following items as being appropriate for (1)cost tracing to the finished furniture,(2)cost allocation of an indirect manufacturing cost to the finished furniture,or (3)as a nonmanufacturing item.
$\begin{array}{lcccc} & \text { Cost } & \text { Cost } & \text { Nonmanu- } \\\text { Item } & \text { Tracing } & \text { Allocation } & \text { facturing }\\ \text { Carpenter wages}&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text { Depreciation - office building}&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Glue for assembly }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Lathe department supervisor }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text { Lathe depreciation}&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Lathe maintenance }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Lathe operator wages }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text { Lumber }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Samples for trade shows }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Metal brackets for drawers }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\ \text {Factory washroom supplies }&\_\_\_\_&\_\_\_\_&\_\_\_\_ \\\end{array}$

Understand the principles of responsibility accounting and its role in organizational control.

Differentiate among cost centers, profit centers, and investment centers based on their scope of responsibility.

Grasp the concept of controllable and uncontrollable expenses in budgeting and performance evaluation.

Comprehend the significance of detailed versus summary reporting in managerial decision-making.