If Activity-Based Costing Is Used, Setups Would Be Classified as a

question 46

Multiple Choice

If activity-based costing is used, setups would be classified as a

• A)unit-level activity.
• B)batch-level activity.
• C)product-level activity.
• D)facility-level activity.

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Definitions:

Standard Direct Labour Rate

refers to the pre-determined cost per hour for direct labor, used in budgeting and measuring labor cost efficiency.

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, multiplied by the standard hourly wage rate.

Actual Direct Labour Rate

This measures the actual cost per hour of labor directly involved in the manufacturing process.

Materials Price Variance

The difference between the actual cost of direct materials purchased and the standard cost, multiplied by the quantity purchased.