Question

Feinstein, Inc., an appliance manufacturer, is developing a new line of ovens that uses controlled-laser technology. The research and testing costs associated with the new ovens is said to arise from a:
a)nit-level activity.?


b)atch-level activity.?

c)roduct-sustaining activity.?

d)acility-level activity.?

e)ompetitive-level activity.?

Answer 1

The research and testing costs associated with the new ovens is said to arise from a product-sustaining activity.

Explanation:

Product-sustaining activities are carried out where appropriate to facilitate the production of each product type. Types of design-sustaining practices include product requirements, technical improvements and special testing procedures.

Such costs may be assigned to each commodity but are not proportional to the number of manufactured units or quantities. Organisation-sustaining operations support the overall production cycle of an organisation.

The ventilation and maintenance of the building, the protection of the facility and the administration are examples of safe facilities.

Products are allocated the costs for the operations at a unit level, batch level and component level depending on the consumption of each commodity. Goods are distributed randomly or viewed as time expense for purpose of facility-sustaining operations.