alleryStart learning →Engineering, testing and quality control costs are given as examples of a:
ADeposit-level cost
BAuditor-level cost
CDeficit-level cost
DProduct-level cost
Answer & Solution
Correct answer: D. Product-level cost
1. These costs arrive once per product, not once per unit or batch.
2. A product-level cost is incurred each time a product is produced.
3. It includes costs such as engineering costs, testing costs, or quality control costs.
4. So this is the product 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_
Keep practising Activity-Based Costing
Browse all Activity-Based Costing questions for US CMA Part 1, or explore more Management Accounting topics.
Related questions
Work the per-unit numbersAbsorption or variableTraditional versus ABCSort costs by their levelOrder the five ABC stagesMoving 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: