An Activity That Is Performed to Support the Production of a New

question 130

Multiple Choice

An activity that is performed to support the production of a new custom-order product is a(n) :

• A)Product-level activity.
• B)Facility-level activity.
• C)Unit-level activity.
• D)Customer-support activity.
• E)Batch-level activity.

---

Definitions:

Standard Direct Labour-Hours

The estimated amount of labor time that should be required to produce one unit of a product.

Fixed Manufacturing Overhead Rate

The rate at which fixed manufacturing overhead costs are allocated to products, typically based on labor hours or machine hours.

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

Applied Fixed Overhead Cost

The portion of fixed overhead costs that is allocated to the production process during a specific period.