Exercise 7-6 (Static) Cost Hierarchy [LO7-1) Flash Express purchases USB flash drives from suppliers and then applies corporate logos to the exterior of those flash drives for its customers. The company maintains a dedicated piece of equipment for each type of product that is processes, such as "top hat" flash drives, credit card flash drives, swing flash drives, and wristband flash drives. The company defines its batches based on customer orders. For example, if one customer places an order for 1,000 credit card flash drives, then that order would be processed as one batch and it would be shipped as one batch. If another customer places and order for 100 "top hat" flash drives, 100 swing flash drives, and 100 wrist band flash drives, then that order would be processed as three batches and shipped as one batch. A number of activities carried out at Flash Express are listed below. a. Sales representatives' periodic visits to customers to keep them informed about the company's existing products and its new product introductions. b. Engaging in price negotiations with the company's supplier of credit card flash drives. C. Programming and calibrating the "top hat" logo application machine so that it properly applies the logo for a specific customer's production run. d. Visually inspecting each flash drive that has been produced to ensure that the logo has been applied in a defect-free manner. e. Preparing shipping documents and packaging for a customer order. f. Periodic maintenance of the equipment used to process wristband flash drives. g. Lighting and heating the company's production facility. h. Preparation of the company's quarterly financial reports. Required: Classify each of the activities above as either a unit-level, batch-level, product-level, customer-level, or organization- sustaining activity. Required: Classify each of the activities above as either a unit-level, batch-level, product-level, customer-level, or organization- sustaining activity. Level a. C. Activity Sales representatives' periodic visits to customers to keep them informed about the company's existing products and its new product introductions. b. Engaging in price negotiations with the company's supplier of credit card flash drives. Programming and calibrating the "top hat" logo application machine so that it properly applies the logo for a specific customer's production run. d. Visually inspecting each flash drive that has been produced to ensure that the logo has been applied in a defect-free manner. e. Preparing shipping documents and packaging for a customer order. f. Periodic maintenance of the equipment used to process wristband flash drives. g. Lighting and heating the company's production facility. h. Preparation of the company's quarterly financial reports
