Which of the Four Levels of the Cost Hierarchy Would

question 114

Multiple Choice

Which of the four levels of the cost hierarchy would be used by a ice cream producer using an activity-based management for a production run of a certain quantity of ice cream of vanilla flavor?

• A)Unit-level activity
• B)Batch-level activity
• C)Product-level activity
• D)Facility-level activity

---

Definitions:

Overapplied Overhead

A situation in which the overhead assigned to products or services exceeds the actual overhead costs, resulting in a discrepancy in cost accounting.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead expenses.

Finished Goods Inventory

Inventory that includes items that have been manufactured and are ready for sale but have not yet been sold.

Unadjusted Cost of Goods Sold

The initial calculation of all costs directly associated with the production of goods sold by a company, not including any adjustments for inventory methods or valuation changes.