An indirect setup labor costs, costs of setup and equipment maintenance and costs of indirect material can be categorized as ______________?
Correct answer: A. variable setup costs
- A. variable setup costs
- B. fixed batch costs
- C. variable batch costs
- D. fixed setup costs
Explanation
Setup labor, setup activity, equipment maintenance and indirect materials generally vary with the number of setups or batches, so they are treated as variable setup costs. Fixed setup costs would remain unchanged within the relevant range.
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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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