Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools: setups, inspections, and assembly. Which of the following would not be used as the activity base for any of these three activities?

a) number of units to be produced

b) number of setups

c) number of inspections

d) number of direct labor hours

Question

Business

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9 September, 14:53

Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools: setups, inspections, and assembly. Which of the following would not be used as the activity base for any of these three activities?

a) number of units to be produced

b) number of setups

c) number of inspections

d) number of direct labor hours

+3

Answers (1)

Know the Answer?

Rohan Potts · Answer 1

The correct answer is a) number of units to be produced.

Explanation:

This condition does not correspond to any activity, since it is not a characteristic of the three groups of costs referenced in the statement. This concept refers to the output of the process, which is determined according to the nature of the operation. It is generally measured in units produced, but in other processes it is usually measured on other variables such as time, money, etc.