In the budget hierarchy, the material handling cost is ___________?
Correct answer: B. batch level cost
- A. fixed manufacturing cost
- B. batch level cost
- C. per unit cost
- D. factory overall cost
Explanation
Material handling is commonly driven by the number of material movements or batches, so it is classified as a batch-level cost in activity-based costing. It is not necessarily incurred for every individual unit produced.
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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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