Discuss the Four Different Levels of Costs Identified by Activity

question 86

Essay

Discuss the four different levels of costs identified by activity based costing (ABC).How should these types of costs be treated in the determination of product cost?

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Definitions:

Tax

An obligatory fiscal contribution or alternative form of taxation placed on individuals by a governing body with the aim of financing government operations and a range of public expenses.

Buyers

Individuals or entities that purchase goods and services.

Government

The organization or system through which a community, state, or nation is ruled, and which sets and enforces laws and policies.

Tax

A mandatory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.