Ubben Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows: The following costs are reported:
Setups would be classified as a

A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.

Question

Ubben Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows: The following costs are reported:
 Setups would be classified as a

A) unit-level activity. 
B) batch-level activity. 
C) product-level activity. 
D) facility-level activity.

Quizplus · Accepted Answer

Setups would be classified as a batch-level activity because they are performed each time a batch of products is produced, rather than being tied to individual units or products.

Ubben Manufacturing Uses an Activity-Based Costing System