Profile Incorporated, an appliance manufacturer, is developing a new line of ovens that uses controlled-laser technology. The research and testing costs associated with the new ovens is said to arise from a:
A)unit-level activity.
B)batch-level activity.
C)product-sustaining-level activity.
D)facility-level activity.
E)competitive-level activity.

Question

Quizplus · Accepted Answer

The research and testing costs associated with the development of the new line of ovens fall under the category of product-sustaining-level activity, as they are related to the design and development of a new product line. This activity is necessary to sustain the production of the new line of ovens and is not related to any specific unit, batch, or facility-level activity.

Profile Incorporated, an Appliance Manufacturer, Is Developing a New Line