Question

Under activity-based costing, which of the following are NOT considered a batch level activity:

A) Machine setups

B) Production scheduling

C) Rent on factory building

D) Product testing

E) Materials receipts

Answer 1

The correct answer is c - Rent on factory building

Batch level activities are costs incurred every time a batch of units or products are produced.

Machine setups, Poduction scheduling, Product testing, Materials receipts are those activities which will occur at the time of production of goods

Rent on a factory building has to be incurred irrespective of production and doesn't have impact on the batch of a goods under ABC method of costing

Hence rent of factory building is NOT considered a batch level activity.