Herndon Brothers Inc.produces a variety of 'all natural' household cleaning supplies that it manufactures and distributes to various grocery stores along the west coast.Which of the following types of costs would most likely be a batch-level cost?

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Quizplus · Accepted Answer

Machine setup costs are typically batch-level costs that are incurred during the setup and preparation of equipment for producing a batch of products. Since Herndon Brothers Inc. produces a variety of household cleaning supplies, it is likely that they would incur batch-level costs such as machine setup costs when preparing equipment for each product batch. A package product design cost is typically a product-level cost as it relates to the design of a specific product, depreciation on the factory building is a facility-level cost and utility costs for factory machinery is a volume-level cost.