Figure 11-2
Owens Ltd Activity Drivers for Each Activity Have Been Identified and Their

question 2

Multiple Choice

Figure 11-2
Owens Ltd. produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications) . Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. In addition, there is a sustaining process with two activities: providing utilities (plantwide) and providing space. Costs have been assigned to each activity using direct tracing and resource drivers: $\begin{array}{ll}\text { Engineering } & £ 1,000,000 \\\text { Setups } & 900,000 \\\text { Machining } & 2,000,000 \\\text { Inspection } & 800,000 \\\text { Providing space } & 250,000 \\\text { Providing utilities } & 180,000\end{array}$ Activity drivers for each activity have been identified and their practical capacities listed: $\begin{array}{ll}\text { Machine hours } & 25,000 \\\text { Setups } & 200 \\\text { Engineering hours } & 5,000 \\\text { Inspection hours } & 2,500\end{array}$ The costs of facility-level activities are assigned using machine hours.
-Refer to Figure 11-2. What is(are) the facility-level activity(ies) ?

• A)providing utilities
• B)providing space
• C)inspecting
• D)both a and b

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Definitions:

Capillaries

The smallest blood vessels in the body's circulatory system, where the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and tissues occurs.

Hepatic Artery

The artery that supplies oxygenated blood to the liver from the heart.

Amylase

An enzyme that helps in breaking down carbohydrates into simpler sugars, mainly found in saliva and pancreatic fluid.

Maltase

Enzyme produced in the small intestine that breaks down maltose to two glucose molecules.