Question

Under activity-based costing, unit-, batch-, and product-level manufacturing overhead costs are A : excluded from estimates...

Under activity-based costing, unit-, batch-, and product-level manufacturing overhead costs are

A : excluded from estimates of product cost.  

B : excluded from inventory costing.

C : included in selling and administrative costs.

D : included in estimates of product cost.

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Homework Answers

Answer #1

Correct Answer ---(D) included in estimates of product cost.

Explanation

In activity based costing cost pools are created in which overhead cost are pooled into one place and according to levels of activity in each pool overhead cost is assigned to different products/departments. Manufacturing costs that are directly related to a particular product is generally not included in cost pool and directly assigned to product cost.

Manufacturing cost can never be included in selling and administrative cost or excluded from inventory costing.

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