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Quality Limousines Maintains a Fleet of Ten Limousines: 5 Extended

Question 149

Short Answer

Quality Limousines maintains a fleet of ten limousines: 5 extended sedans used for airport transportation, 3 stretch limousines used for transportation to and from local events, and 2 ultra-stretch limousines used for all-night parties. Quality considers its "units" as individual vehicle bookings. Product lines are associated with the 3 types of vehicles. A "batch" of units constitutes all of the bookings for a particular date.
Various costs associated with Quality's operations are listed below. Indicate whether each cost most likely relates to a(n): (A)organization- or facility-sustaining activity, (B)customer-sustaining activity, (C)product-sustaining activity, (D)batch-level activity, or (E)unit-level activity.
____ 1. Cost of consultants who perform customer-satisfaction surveys for arriving airport passengers
____ 2. Driver salaries for January 20x2
____ 3. Fuel costs for extended sedans during December 20x1
____ 4. General advertising campaign promoting all three product lines
____ 5. Supplies for an ultra-stretch limousine booked on February 14, 20x2
____ 6. Maintenance costs for ultra-stretch limousines
____ 7. Market research conducted in local high schools
____ 8. Salary of Quality's chief operating officer
____ 9. Special advertising promotion in connection with a local football championship
____ 10. Consultant's salary for designing Quality's web page

Correct Answer:

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1. A
2. D
3. C
4. A
...

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