Question - Cost Hierarchy
CD Express, Inc., provides CD duplicating services for its customers. An order from a customer can be for a single copy or for thousands of copies. Most jobs are broken down into batches to allow smaller jobs, with higher priorities, to have access to the machines.
A number of activities carried out at CD Express are listed below.
Required: Classify each of the activities below as either a unit-level, batch-level, product-level, customer-level, or organization-sustaining activity. An order to duplicate a particular CD is a product-level activity. Assume the order is large enough that it must be broken down into batches.
a. Sales representatives' periodic visits to customers to keep them informed about the services provided by CD Express.
b. Ordering labels from the printer for a particular CD.
c. Setting up the CD duplicating machine to make copies from a particular master CD.
d. Loading the automatic labeling machine with labels for a particular CD.
e. Visually inspecting CDs and placing them by hand into protective plastic cases prior to shipping.
f. Preparation of the shipping documents for the order.
g. Periodic maintenance of equipment.
h. Lighting and heating the company's production facility.
I. Preparation of quarterly financial reports.