Eldervale Winery is a producer of premium wine.Which of the following is an example of a unit level cost?
A) The costs of the labels on each bottle of wine
B) The costs of designing the labels on a wine bottle
C) Advertising costs
D) Costs of delivering wine to customers

Question

Quizplus · Accepted Answer

Unit level costs are costs that are directly associated with the production of each unit of product or service. The costs of labels on each bottle of wine are directly associated with each bottle and are therefore an example of a unit level cost. The other options listed are not unit level costs. The costs of designing the labels on a wine bottle are a batch level cost as they are incurred for a group of bottles. Advertising costs are a facility level cost as they relate to the overall operation of the winery and not to specific units of production. Costs of delivering wine to customers are a batch level or product level cost depending on the size of the delivery.

Eldervale Winery Is a Producer of Premium Wine