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)caused by a change in the engineering plans for a product.

Question

Quizplus · Accepted Answer

Facility-level costs are those costs that are incurred to maintain the plant's production capacity. These costs are essential to keep the plant operational, and they include expenses like building rent, property taxes, insurance, depreciation on plant and equipment, and maintenance and repairs on the plant's infrastructure. These costs are not related to marketing, research and development, or changes in product engineering plans, but they are necessary to support the plant's ongoing production activities. Therefore, option B is the correct choice.

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