In an activity-based cost management (ABM)system,facility-level costs are those that are incurred to:
A) sustain the company's marketing program.
B) maintain the plant's production capacity.
C) support the research and development process.
D) cause a change in the engineering plans for a product.

Question

Quizplus · Accepted Answer

Facility-level costs are expenses associated with maintaining the production capacity and physical space of the plant or facility. These costs may include rent, property taxes, equipment maintenance, and utilities. Option A is incorrect because marketing costs are not related to facility-level costs. Option C is incorrect because research and development costs are often product-level costs. Option D is incorrect because changes to engineering plans are usually product-level costs as well.

In an Activity-Based Cost Management (ABM)system,facility-Level Costs Are Those That