Question

Identify each of the following activities as unit level (U), batch level (B), product level (P), or facility level (F) to indicate the way each is incurred with respect to production. [Select] 1 Organizing production [Select] v 2 Calibrating machines Select] 3 Printing checks [Select) v 4 Cleaning workplace Select] 5 Providing electricity Select) 6 Assembling components [Select) 7 Cutting parts

Answer 1

Let's take a look at each activity.

UNIT LEVEL ACTIVITY

These are the activities which are performed each time a unit is produced. Cost of direct material, direct labour, machine maintenance etc. are some examples.

BATCH LEVEL ACTIVITY

These activities are cost incurred everytime a batch of units is produced or a series of steps are performed. Machine setup, quality testing, maintenance etc. are examples.

PRODUCT LEVEL ACTIVITY

Activities which relates to specific products which must be carried out regardless of how many batches of units of products are produced or sold. Maintaining a product manager and staff, advertising a staff etc. are examples.

FACILITY LEVEL ACTIVITY

These are actions taken to maintain general operations of a business. These actions can't be traced to individual products. They maintain the facility as a whole.

Now let's answer the question

1	Organizing production	Product level (P)
2	Calibrating machines	Batch level (B)
3	Printing checks	Facility level (F)
4	Cleaning workplace	Facility level (F)
5	Providing electricity	Facility level (F)
6	Assembling components	Unit level (U)
7	Cutting parts	Unit level (U)
8	Sampling product quality	Batch level (B)
9	Receiving shipments	Batch level (B)
10	Providing personnel support	Facility level (F)

Please provide feedback if it was helpful. Feel free to comment if you have any doubts.