Question
Attraction Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special
Attraction Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. In addition, there is a sustaining process with two activities: providing utilities (plantwide) and providing space. Costs have been assigned to each activity using direct tracing and resource drivers:
Engineering$1,000,000Setups900,000Machining2,000,000Inspection800,000Providing space250,000Providing utilities180,000
Activity drivers for each activity have been identified and their practical capacities listed:
Machine hours25,000Setups200Engineering hours5,000Inspection hours2,500
The costs of facility-level activities are assigned using machine hours.
What is (are) the product-level activity(ies)?
a.inspecting
b.engineering
c.setups
d.All of these choices are correct.
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