Question

Which description reflects an organization-level activity?

1) an activity that continues regardless of the units produced and customers served
2) an activity that is required by GAAP
3) an activity that provides specific benefits to products and services
4) an activity with costs allocated to products and services

Answer 1

An organization-level activity is one that supports the organization as a whole and is not tied directly to production volume or number of customers, reflecting fixed costs like management salaries and company-wide advertising.

Step-by-step explanation:

The description that reflects an organization-level activity is an activity that continues regardless of the units produced and customers served. Organization-level activities are designed to support the organization as a whole and are not directly tied to the production volume or the number of customers.

Rather, they are related to the overall capacity and administrative functions of the company and are often considered fixed costs because they do not vary with the level of production or sales. These could include activities such as top management salaries, company-wide advertising, or the maintenance of the headquarters.