Attraction Corporation produces specially machined parts. The parts are produced
ID: 2546638 • Letter: A
Question
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:
Engineering
$1,000,000
Setups
900,000
Machining
2,000,000
Inspection
800,000
Providing space
250,000
Providing utilities
180,000
Activity drivers for each activity have been identified and their practical capacities listed:
Machine hours
25,000
Setups
200
Engineering hours
5,000
Inspection hours
2,500
The costs of facility-level activities are assigned using machine hours.
What is (are) the unit-level activity(ies)?
setups
providing space
machining
engineering
Engineering
$1,000,000
Setups
900,000
Machining
2,000,000
Inspection
800,000
Providing space
250,000
Providing utilities
180,000
Explanation / Answer
Machining is the unit-level activity Option C is correct
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