Cosmos Limited uses activity based costing and accumulates overhead costs in the following cost pools: (1) Human Resources (2) Maintenance of…
CA Intermediate · Cost and Management Accounting · PYQS · May 2025
Cosmos Limited uses activity based costing and accumulates overhead costs in the following cost pools: (1) Human Resources (2) Maintenance of buildings (3) Parts Management (4) Plant security (5) Purchasing (6) Floor manager's salary (7) Quality control (8) Machine set-up (9) Designing the product (10) Receiving Department Classify each cost pool as per cost hierarchy i.e. unit level, batch level, product level or facility level.
Suggested Answer and Working Notes:
S. No. Cost Pool Cost Hierarchy Level (1) Human Resources Facility-level (2) Maintenance of buildings Facility-level (3) Parts Management Batch-level/Product Level (4) Plant security Facility-level (5) Purchasing Batch-level (6) Floor manager's salary Facility-level (7) Quality control Batch-level / Unit Level (8) Machine set-up Batch-level (9) Designing the product Product-level (10) Receiving Department Batch-level
Topics: Marginal Costing, Activity Based Costing
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