1. Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore “fixed” costs.
2. Batch-level activities are performed each time a batch of goods is handled or processed.
3. In activity-based costing, some costs may be broken down and assigned to two activity cost pools. For example, part of a supervisor’s salary may be classified as a product-level activity and part of it may be classified as a batch-level activity.
4. Which of the following would be an acceptable measure of activity for a material handling activity cost pool?
a. Yes – yes
b. No – yes
c. Yes – No
d. No – No