Question 3

(Total: 30 marks)

Gandalf and Company makes table tennis and Golf equipment for the retailers around the world.Below you will find a number of activities and cost at Gandalf Corporation. Please list the activity as either, "Batch", "Unit", "Product" or "Organization-sustaining".

Activity

Level

Factory utilities

A steering wheel is installed in a golf cart.

Machine set-up.

Completed golf carts are individually tested on the company's test track.

Molding and sanding each unit of product

An outside lawyer draws up a new generic sales contract for the company, limiting Go Pro's liability in case of accidents that involve its golf carts.

Electricity is used to heat and light the factory and the administrative offices.

A golf cart is painted. cost hierarchy often used to implement ABC, with the exception of

Research and development

The company's engineer modifies the design of a model to eliminate a potential safety problem.