ECONOMICS

COST ACCOUNTING

ACTIVITY BASED COSTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Unit-level‌ ‌activities‌ ‌are‌ ‌performed‌ ‌each‌ ‌time‌ ‌a‌ ‌new‌ ‌departmental‌ ‌unit‌ ‌such‌ ‌as‌ ‌a‌ ‌regional‌ ‌sales‌ ‌office‌ ‌is‌ ‌created.‌
A
True
B
False
Explanation: 

Detailed explanation-1: -False, Unit level activities are not performed every ti…

Detailed explanation-2: -Unit-level activities happen each time a product is made. This is unlike batch-level activities that happen every time a batch of products are produced. Unit-level activities are those that support making each individual unit, while batch-level include a group of units.

Detailed explanation-3: -Batch-level activities are performed each time a batch is handled or processed, regardless of how many units are in the batch. For example, tasks such as placing purchase orders, setting up equipment, and arranging for shipments to customers are batch-level activities.

Detailed explanation-4: -The costs of direct materials, direct labor, and machine maintenance are examples of unit‐level activities.

Detailed explanation-5: -Inspecting. Inspecting is not a unit-level activity; it is a batch-level activity.

There is 1 question to complete.