Figure 4-19 Attraction Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. In addition, there is a sustaining process with two activities: providing utilities (plantwide) and providing space. Costs have been assigned to each activity using direct tracing and resource drivers:
Activity drivers for each activity have been identified and their practical capacities listed:
The costs of facility-level activities are assigned using machine hours.
Refer to 4-19. What is (are) the facility-level activity(ies)?
A) set-ups
B) inspecting
C) providing space
D) both a and b

Question

Figure 4-19 Attraction Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. In addition, there is a sustaining process with two activities: providing utilities (plantwide) and providing space. Costs have been assigned to each activity using direct tracing and resource drivers:
 Activity drivers for each activity have been identified and their practical capacities listed:
 The costs of facility-level activities are assigned using machine hours.
Refer to 4-19. What is (are) the facility-level activity(ies)?
A) set-ups 
B) inspecting 
C) providing space 
D) both a and b

Quizplus · Accepted Answer

Providing space is a facility-level activity because it is a cost that cannot be directly traced to a specific product or batch of products, and it is necessary to have a facility in order to produce any product. Set-ups and inspecting are batch-level activities because they are performed for each batch of product, and their costs are traced specifically to each batch.

Figure 4-19 Attraction Corporation Produces Specially Machined Parts