Cost hierarchy classification. (J. Watson) The following outlines a number of activities related to operations at Nordan Manufacturing Ltd.:
a. Engineers design new products.
b. Production workers set up machines.
c. Completed goods are inspected for quality assurance.
d. Direct materials are moved from inventory to the production line.
e. Raw materials are received from the supplier.
f. Regular equipment maintenance is performed.
g. The inventory management software is updated.
REQUIRED
1. Classify each of the preceding activities as output unit-level, batch-level, product-sustaining, or facility-sustaining. Explain your answers.
2. Identify a possible appropriate cost driver for each of the activities listed.