Asked by Jared Bernardi on Jun 07, 2024
Verified
Activities causing overhead cost in an organization are typically separated into four levels: (1)direct activities,(2)indirect activities,(3)batch level activities,and (4)facility level activities.
Overhead Cost
Indirect expenses related to the day-to-day running of a business, such as rent, utilities, and administrative costs.
Batch Level Activities
Activities and costs incurred for a group of products rather than individual units or processes.
Facility Level Activities
Operations and tasks that support the entire organization and are not tied to a specific product or service.
- Develop an understanding of the unique characteristics separating direct, indirect, product-level, batch-level, unit-level, and facility-level costs.
- Pinpoint the characteristics and examples pertaining to costs on a unit-level, batch-level, product-level, and facility-level basis.
Verified Answer
LO
Larose OlshoppeJun 09, 2024
Final Answer :
False
Explanation :
Activities causing overhead cost in an organization are typically separated into four levels: (1) unit-level activities, (2) batch-level activities, (3) product-level activities, and (4) facility-level activities. Direct and indirect activities are not the standard categories used for classifying overhead costs in activity-based costing.
Learning Objectives
- Develop an understanding of the unique characteristics separating direct, indirect, product-level, batch-level, unit-level, and facility-level costs.
- Pinpoint the characteristics and examples pertaining to costs on a unit-level, batch-level, product-level, and facility-level basis.