Home › US CMA Part 1 › Management Accounting › Activity-Based Costing › A cost incurred each time a unit of product is p…
A cost incurred each time a unit of product is produced is described as a:
ABoard-level cost
BUnit-level cost
CCourt-level cost
DState-level cost
Answer & Solution
Correct answer: B. Unit-level cost
1. Costs are gathered at four different levels.
2. A unit-level cost is incurred each time a unit of product is produced.
3. It includes costs such as materials and labor.
4. So this is the unit level.
_Source: OpenStax Principles of Accounting Volume 2, Managerial Accounting (CC BY-NC-SA 4.0), Ch 6 'Activity-Based, Variable, and Absorption Costing', sections 6.1-6.5_
Related questions
Moving to activity-based costing tends to change the per-unit cost of low-volume products One stated disadvantage of activity-based costing is that the method is:When the entire finished goods inventory is sold, net income under the two methods is:Fixed overhead is $12,000 and 10,000 units are made. Under absorption costing each unit caWhy is activity-based costing described as a more accurate way of allocating overhead?In the five stages of activity-based costing, activity rates are calculated for each:Absorption costing applies all direct costs, fixed overhead and variable overhead to the:Under variable costing, fixed overhead costs are treated in which way?