Using the Cost Rollup Process to Calculate Product Costs
The cost of 2002, when you add it to items 2001 and 2003, becomes the lowerlevel or component costs for item 1001. The labor, machine, and overhead costs associated with manufacturing item 2002 are thislevel or assemblylevel costs for 2002. However, they would become lowerlevel or componentlevel costs when associated with item 1001.