A cost, consists of some fixed and some variable cost with respect to machine setup hours is termed as _________?
Correct answer: A. setup cost
- A. setup cost
- B. batch cost
- C. facility cost
- D. lump sum cost
Explanation
A setup cost is incurred when preparing a machine or production batch and may contain both fixed and variable elements in relation to setup hours. Batch cost is broader, while facility cost is generally unrelated to individual setup activity.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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