A company has a very small raw materials inventory area, so has to purchase raw materials needed for each production run. Under ABC costing, this raw material inventory purchase cost would be categorized as:
A. Unit level cost
B. Batch level cost
C. Product level cost
D. Production sustaining cost
answer is option A) Unit level cost
The company has to purchase raw materials needed for each production run.
Unit‐level activities occur every time a service is performed or a product is made.
A company has a very small raw materials inventory area, so has to purchase raw materials...
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Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Year 2 Budgeted production, i First 60,000 Second 90,000 Third Fourth 150.000 100.000 First 70,000 Musk oil has become so popular as a perfume...
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