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Identify the four level hierarchy that in which costs are grouped while creating an Activity-Based Costing System. Choose a manufacturing company and identify three types of costs that should be included in each category.

User Medowlock
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Answer:

The four levels of cost hierarchy used in the ABC system are:

Unit Level Costs

Batch Level Costs

Product Level Costs

Facility Level Costs

For a company engaged in producing automobiles:

Unit level costs are those which vary with the volume of production: Electricity Costs, Metal Coating, Painting,

Batch level costs are costs which vary with the number of batches run: Machine Setup Costs, Purchase Ordering Costs, Inspection Costs

Product level costs vary with the number of product lines: Product Design Costs, Research and Development Costs, Engineering Change Costs

Facility Level Costs vary with the number of facilities: Rent Cost of the facility, Audit Costs, Depreciation of the plant and buildings.

Step-by-step explanation:

User Suhrob
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