Fast Track Company, which sells electronics in retail outlets and on the Internet, uses activity-based budgeting in the preparation of its selling, general, and administrative expense budget. Which of the following costs would the company likely classify as a unit-level expense on its budget?

Question

Quizplus · Accepted Answer

Retail outlet sales commissions are likely to be classified as a unit-level expense because they are directly related to the number of units sold. The other options are likely to be classified as batch-level (media advertising), product-level (salaries of web-site maintenance personnel), or facility-level (administrative salaries, salary of the sales manager employed at Store No. 23) expenses.

Fast Track Company, Which Sells Electronics in Retail Outlets and on the Internet