Define the four levels of cost hierarchy used in the ABC costing system.
Define the four levels of cost hierarchy used in the ABC costing system.
Homework Answers
Answer -
Four levels of cost hierarchy used in the ABC costing
system -
1. Output
unit-level costs are the costs of activities performed on
each unit of a product or service.
2. Batch – level costs are the costs of activities related to a group of units of a product or service rather than each unit of product or service.
3. Product – sustaining costs (service) is the cost of activities undertaken to support each product or services despite the number of units or batches in which the units are produced.
4. Facility – sustaining costs are the costs of activities that cannot be traced to individual products or services but that help the organisation as a whole.
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Define the four levels of cost hierarchy used in the ABC costing
system.
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