Question

Identify each of the following activities as unit level (U), batch level (B), product level (P), or facility level (F) to indicate the way each is incurred with respect to production.

1. Paying real estate taxes on the factory building

2. Attaching labels to collars of shirts

3. Redesigning a bicycle seat in response to customer feedback

4. Cleaning the assembly department

5. Polishing gold wedding rings

6. Mixing bread dough in a commercial bakery

7. Sampling cookies to determine quality

8. Recycling hazardous waste

9. Reducing greenhouse gas emissions

Short answer

Answer

Out of the given activities, three are facility-level activities, one is product-level activities, three are batch-level activities, and two are unit-level activities.

Step-by-step solution

Real estate taxes

A factory building is a facility that is used for all production activities. So real estate tax on factory buildings would be a facility-level activity. With respect to production, this activity would be incurred based on factory building space.

Label attachment

Attaching labels to the collars of the shirt is done for each individual unit. This activity would be affected by the no. of shirts. So this is a unit-level activity. This activity is incurred based on the no. of shirts.

Bicycle redesigning

The bicycle seat would be redesigned for the entire product line. All the individual units would be designed for the same design. So this is aproduct-level activity. This activity would be incurred based on the no. of design hours.

Assembling department cleaning

The assembling department is a part of the facility. So cleaning the assembling department would be facility-level activity. This activity would be incurred based on the space of the assembling department.

Polish of gold rings

Polishing would be done for each wedding ring. So this is a unit-level activity. It would be incurred based on the no. of rings.

Mixing of bread

Bread dough is made to make cookies. Each bread dough is made to make a batch of cookies. So mixing bread dough would be a batch-level activity. It would be incurred based on the number of batches.

Sampling for quality inspection

Sampling is taken of each batch of cookies to determine quality. Sampling for inspection is a batch-level activity. It would be incurred based onno. of lots produced or no. of batches produced.

Recycling of waste

Hazardous waste is incurred due to production processes or other factory-level activity. This would be a batch-level activity as it is affected by each batch of the production process. This activity would be incurred based on Tons recycled.

Reducing greenhouse effect

Greenhouse gas is generated due to the production process. Reducing greenhouse gas emissions is a facility-level activity. This activity would be incurred based on Tons of co2 generation by production.