Question

For questions 12 - 15, answer with the following alternative:

to. Unit-level cost

b. Batch-level cost

c. Product-level cost

d. Facility level cost

12. In a factory of different types of bicycles, the rental cost of a machine that is used exclusively for one type of bicycle.

13. The cost of inspection of brakes in a car factory. The brakes are inspected on every car produced.

14. The cost of inspection in a light bulb factory. A sample is obtained from each batch of bulbs for inspection.

15. The depreciation cost of the manufacturing building.

Answer 1

12. Product level cost

Explanation:

It relates to those activities which supports entire product line but not any individual unit. In the present case, the rental cost is for the entire product not for any individual product

13. Unit level cost

Explanation:

It relates to those activities which is required to perform every time a product is made. In the above situation, the brakes are inspected on every car produced

14. Batch level cost

  Explanation:

The activities to be perfomed every time a batch of units produced. In this case, Inspection will be performed for every batch not for individual unit

15. Facility level cost

Explanation:

Facility level activites are necessary for development and production to take place.