All the salaries are paid to supervisors and engineers and cost of leasing equipment are classified as __________?
Correct answer: B. fixed setup costs
- A. variable setup costs
- B. fixed setup costs
- C. variable batch costs
- D. fixed batch costsCompare Credit Cards
Explanation
Supervisors' and engineers' salaries and equipment leasing do not normally change with the number of batches set up, so they are fixed setup costs. Variable setup costs would fluctuate with 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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