Which of the Following Items Would Be Classified as a Batch-Level

question 80

Multiple Choice

Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM) system?

• A) Indirect labor.
• B) Production supervisor's salary.
• C) Depreciation on factory building.
• D) Machinery set-up costs.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Variable Overhead Cost

Overhead costs that vary with the level of production or business activity, such as utilities or materials used in production.

Absorption Costing

A method of cost accounting that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Variable Costing

A costing method where only variable manufacturing costs are included in the cost of goods sold, with fixed manufacturing overhead treated as a period expense.