Astro Corporation, a furniture manufacture, uses an activity-based costing system. Classify the following activity of Astro as a unit-level, batch-level, product-level or facility-level activity: Packaging completed furniture in boxes for shipment.
Activity-based costing is an effective method of assessing the cost of a manufacturing unit. Activities that are involved in the production of units are the cost drivers. Such as for cutting the activity of woods, the Number of cuts is the cost driver.
Answer and Explanation: 1
Packaging completed furniture in boxes for shipment is a unit-level activity. It is considered unit-level activity as the shipping is related to the...
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fromChapter 7 / Lesson 8
Learn about the activity-based costing method (ABC method). Explore how the ABC method is used, who uses the method, and what the pros and cons are.