US CMA Part 1 · Chapter 4 · Question 14 of 22
In an activity-based costing cost hierarchy, machine setup costs that are incurred each time a group of units is produced are classified as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Batch-level costs
Explanation
Batch-level costs vary with the number of batches rather than the number of units; setups, purchase orders and material moves are typical examples. Unit-level costs vary with each unit, product-sustaining costs support a product line, and facility-sustaining costs support the operation as a whole.
More Cost Management MCQs
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