Costing - Study Mode
[#746] In activity based costing method implementation, an output unit level costs are classified as
Correct Answer
(A) indirect costs
Explanation
Solution: In activity based costing method implementation, an output unit level costs are classified as indirect costs. Indirect costs are costs used by multiple activities, and which cannot therefore be assigned to specific cost objects.
[#747] Hierarchy which is based on different types of cost allocation and drivers, is to categorize cost pool activity is classified as
Correct Answer
(A) cost hierarchy
Explanation
Solution: Hierarchy which is based on different types of cost allocation and drivers, is to categorize cost pool activity is classified as cost hierarchy. The cost hierarchy is a classification system used in activity-based costing that designates activities based on how easily they can be traced to a product.
[#748] Product which requires large amount of resources, but incur low per unit cost is classified as
Correct Answer
(A) product under costing
Explanation
Solution: Product which requires large amount of resources, but incur low per unit cost is classified as product under costing. Product cost refers to the costs incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead.
[#749] Costs of undertaken activities is to support individual products are known as
Correct Answer
(D) product sustaining costs
Explanation
Solution: Costs of undertaken activities is to support individual products are known as product sustaining costs. Product-sustaining costs are cost activities that support a particular product or service line, regardless of the number of units produced.
[#750] For estimation of each cost pool for cost function, attention must be paid to
Correct Answer
(D) cost hierarchy
Explanation
Solution: For estimation of each cost pool for cost function, attention must be paid to cost hierarchy. The cost hierarchy is a classification system used in activity-based costing that designates activities based on how easily they can be traced to a product.