If Activity-Based Costing Is Used,what Type of Activity Would Insurance

question 131

Multiple Choice

If activity-based costing is used,what type of activity would insurance on the plant be classified as?

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

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Definitions:

Unfavorable Variance

A situation where actual costs exceed the standard or budgeted costs, often indicating inefficiencies or increased expenses.

Favorable Variance

A financial term indicating that actual costs were lower or revenues were higher than planned.

Budgeted Amount

The projected costs or revenues allocated to a specific activity or period, based on estimates.

Budget Ratcheting

The practice of setting future budget allocations based on the current period’s expenditures, discouraging under-spending in fear of budget cuts.