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Ferguson Molding Company produces custom bottle caps and jar covers for large cosmetic companies. Each customer owns the custom-made molds that are used for the caps and jar covers, so caps are produced only to customer order. Each order requires the setting of molds in molding machines. Two full time mechanics, whose combined total annual salary and benefits are $160,000 per year, are employed setting up and breaking down the molding machines. An order consists of anywhere from 50,000 to 500,000 units. 80 orders were received during the year 2008 for individual custom production runs. The total number of units produced was 8 million.
-Each production run of caps or jar covers is an example of
A) Facility-level activity
B) Product- level activity
C) Batch-level activity
D) Customer-level activity

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Each production run of caps or jar covers requires setting up molds in molding machines, which is a task that varies with the number of batches or orders, not the number of units produced or the number of customers. This makes it a batch-level activity, as costs and efforts are associated with each batch or order.

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