Q158
Setup cost is a type of __________ cost.
A.
fixed
AnswerB.
variable
C.
semi variable
D.
carrying
Answer: Option A
Solution
Answer: Option A
Solution:
Setup cost is a type of fixed cost. Setup cost is the cost incurred to get equipment ready to process a different batch of goods. Hence, setup cost is regarded as a batch-level cost in activity based costing. Setup cost is considered to be a non-value-added cost that should be minimized.