Lavish Lamps produces high-quality lighting fixtures in its manufacturing plant. The fixtures are designed and manufactured according to the customer’s specifications and are therefore made-to-order

Lavish Lamps produces high-quality lighting fixtures in its manufacturing plant. The fixtures are designed and manufactured according to the customer’s specifications and are therefore made-to-order. The plant manager has provided you with the following list of key activities within the plant:

• Product design
• Production scheduling
• Purchasing department
• Receiving department
• Machine set-up
• Quality control
• Plant security
• Customer credit check
• Machine operation
• Maintenance

Required:

For each of these activities:

• Identify a cost object and a cost driver.
• How would you recommend recording each of these costs?
• How should these costs be allocated to lighting fixtures?