Cost hierarchy. Teledor Inc. manufactures boomboxes (music systems with radio, MP3, and compact disc

Cost hierarchy. Teledor Inc. manufactures boomboxes (music systems with radio, MP3, and compact disc players) for different well-known companies. The boomboxes differ signifi cantly in their complexity and the batch sizes in which they are manufactured. The following costs were incurred in 2012: a. Indirect manufacturing labour costs such as supervision that supports direct manufacturing labour, $1,200,000. b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers that are related to the number of purchase orders placed, $600,000. c. Cost of indirect materials, $350,000. d. Costs incurred to set up machines each time a different product needs to be manufactured, $700,000. e. Designing processes, drawing process charts, making engineering process changes for products, $900,000. f. Machine-related overhead costs such as amortization, maintenance, production engineer ing, $1,200,000. These resources are related to the activity of running the machines. g. Plant management, plant rent, and insurance, $950,000. REQUIRED 1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining. Explain your answers. 2. Consider two boomboxes made by Teledor Inc. One boombox is complex to make and is made in many batches. The other boombox is simple to make and is made in a few batches. Suppose that Teledor needs the same number of machine-hours to make either boombox. If Teledor alloca