Inspecting is not a unit-level activity; it is a batch-level activity.
What is unit-level activity?
Unit-level activities are activities that are related to producing each unit. This is unlike batch-level activities that happen every time a batch of products are produced. Unit-level activities are those that support making each individual unit, while batch-level include a group of units.
Which of the following is an example of unit-level activity?
Unit‐level activities occur every time a service is performed or a product is made. The costs of direct materials, direct labor, and machine maintenance are examples of unit‐level activities. Batch‐level activities are costs incurred every time a group (batch) of units is produced or a series of steps is performed.
Which of the following is a product level activity?
Examples of product-level activities are the cost of the product manager for a product, the cost to design a product, the cost to design product packaging, the cost to issue an engineering change order, and the cost to advertise a product.
Which of the following is considered to be a unit-level cost?
Direct materials are normally considered as unit-level costs.
What are the 4 levels of activity used in ABC?
Four Levels of Activity
With activity-based costing, sometimes referred to as ABC, companies account for expenses by categorizing the source of the cost into one of four general groups: unit-based, batch-based, product-based, and facility-based costs.
Which is an example of a unit-level activity quizlet?
For example, providing power to run processing equipment would be a unit-level activity because power tends to be consumed in proportion to the number of units produced. Batch-level activities are performed each time a batch is handled or processed, regardless of how many units are in the batch.
Which of the following is an example of an organization-sustaining activity?
Organization-sustaining activities are those actions taken to maintain the operations of a business. For example, a company must pay property taxes, utilities, and insurance, irrespective of what it does to produce goods for sale or provide services to customers.
Which of the following is a non value added activity?
Typical non-value added activities include scheduling, moving work-in-process from point to point, setting up equipment, recording time spent on a particular job, inspecting a part, and billing a customer.
What is activity level in accounting?
Dictionary of Accounting Terms for: activity level. activity level. description of how an activity is used by a cost object or other activity. Some activity levels describe the cost object that uses the activity and the nature of this use.
Which of the following is a facility level activity?
Facility-level activities are those actions taken to maintain the general operations of a business. These actions cannot be traced to individual products, production cells, or product lines.
Is advertising a product level activity?
Product-level activities.
These activities relate to specific products and must be carried out regardless of how many batches or units of product are produced or sold. For example, designing a product, advertising a product, and maintaining a product manager and staff are all product-level activities.
Which of the following activity levels is an example of the clerical activity associated with processing purchase orders to produce an order for a standard product?
Batch-level activity. The clerical activity associated with processing purchase orders to produce an order for a standard product is an example of a(n): Unit-level activity.
Which of the following is not a period cost?
Items that are not period costs are those costs included in prepaid expenses, such as prepaid rent. Also, costs included in inventory, such as direct labor, direct materials, and manufacturing overhead, are not classified as period costs.
What are activity cost pools?
An activity cost pool is an aggregate of all the costs associated with performing a particular business task, such as making a particular product. By pooling all costs incurred in a particular task, it is simpler to get an accurate estimate of the cost of that task.
Which of the following is not included in functional classification of overheads?
Administration overheads and sales and distribution overheads are not absorbed into product costs.
Which of the following is not a benefit of ABC?
Reduction of prime cost is not the benefit of the activity-based costing system. Explanation: In an activity-based cost system, a unique measure of cost is applied to the products and manufacturing items. A more accurate system of allocating the costs to the products is exercised in the ABC system.
What are the four levels of cost hierarchy?
What is the Cost Hierarchy?
Activities at the unit level. These involve activities performed on each unit produced. Activities at the batch level. These involve activities performed whenever a batch of units is processed. Activities at the product level. Activities at the facility level.
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