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Which of the following is an example of a facility-level activity?

a. Purchasing raw-materials
b. Providing plant security
c. Developing product-testing procedures
d. Introducing new products

User Dis
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1 Answer

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Final answer:

The correct answer to which option is an example of a facility-level activity is b. Providing plant security. Facility-level activities support the overall operations of a facility but are not directly tied to any specific product or service.

Step-by-step explanation:

To answer which of the listed options is an example of a facility-level activity, we need to understand what a facility-level activity is within the context of cost accounting and activity-based costing. Facility-level activities are those activities that are required to keep a facility running, but they are not directly tied to any specific product or service. These activities support operations as a whole.

Based on the options provided:

  • Purchasing raw-materials is typically a unit-level activity related to production output.
  • Providing plant security is a facility-level activity because it is necessary to maintain the facility regardless of the quantity of production or the specific products being made.
  • Developing product-testing procedures is generally a product-level activity, as it relates to ensuring the quality of specific products.
  • Introducing new products is also considered a product-level activity, as it's directly associated with specific products in development and launch.

Therefore, the correct answer is b. Providing plant security, as it is a fundamental facility-level task that supports the overall safe operation of the plant or facility without being directly attributable to the production of specific goods or services.

User Mikeyy
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