Answer the following questions using the information below:
Products S5 and CP8 each are assigned $100.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8.
-According to an ABC system,S5 uses a disproportionately ________.
A) smaller amount of unit-level costs
B) larger amount of unit-level costs
C) smaller amount of batch-level costs
D) larger amount of batch-level costs

Question

Quizplus · Accepted Answer

In an ABC system, batch-level costs are allocated based on activities such as setup time. Since S5 requires less setup time than CP8, it uses a smaller amount of batch-level costs.

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