A manufacturer of audio equipment employing an activity-based cost hierarchy uses the unit, batch, product, and facility levels to classify its activities. A batch-level activity is
A) testing products.
B) inspection.
C) implementation of engineering changes.
D) maintenance of the building.

Question

Quizplus · Accepted Answer

Batch-level activities are those that are performed for a batch of products, not individual units. Inspection is a typical batch-level activity that is performed for each batch of products to ensure that they meet quality standards. Testing products can be a unit-level or batch-level activity, depending on whether it is done for each individual unit or for a batch of products. Implementation of engineering changes is a product-level activity as it is associated with specific products, and maintenance of the building is a facility-level activity as it benefits the entire facility.

A Manufacturer of Audio Equipment Employing an Activity-Based Cost Hierarchy