Ask Question
18 September, 13:49

Identify the four level hierarchy that in which costs are grouped while creating an Activity-Based Costing System. Choose a manufacturing company and identify three types of costs that should be included in each category.

+4
Answers (1)
  1. 18 September, 14:30
    0
    The four levels of cost hierarchy used in the ABC system are:

    Unit Level Costs

    Batch Level Costs

    Product Level Costs

    Facility Level Costs

    For a company engaged in producing automobiles:

    Unit level costs are those which vary with the volume of production: Electricity Costs, Metal Coating, Painting,

    Batch level costs are costs which vary with the number of batches run: Machine Setup Costs, Purchase Ordering Costs, Inspection Costs

    Product level costs vary with the number of product lines: Product Design Costs, Research and Development Costs, Engineering Change Costs

    Facility Level Costs vary with the number of facilities: Rent Cost of the facility, Audit Costs, Depreciation of the plant and buildings.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Identify the four level hierarchy that in which costs are grouped while creating an Activity-Based Costing System. Choose a manufacturing ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers