Figure 4-18 Marion Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows:
The following costs are reported:
Refer to Figure 4-18. Setups would be classified as a
A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.

Question

Figure 4-18 Marion Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows:
 The following costs are reported:
 Refer to Figure 4-18. Setups would be classified as a
A) unit-level activity. 
B) batch-level activity. 
C) product-level activity. 
D) facility-level activity.

Quizplus · Accepted Answer

Setups are typically performed for a batch of products rather than for individual units. Therefore, setups would be classified as a batch-level activity.

Figure 4-18 Marion Manufacturing Uses an Activity-Based Costing System