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Hi Cath.
Could you provide some more context behind a product/process level costs?
So we have:
1. Unit costs- clear on these type of costs
2.Batch level – clear on these type of costs
3.Product/ process – not so clear on these type of costs.
4.organisational level-clear on these type of costsMy BPP booklet says equipment maintenance falls under these costs- is this because equipment Is used In the manufacturing process of a good? so it can be classified as a product costs?
Hi – yes these distinctions relate to the ABC cost hierarchy.
Product costs are those costs which are incurred to support the product line as a whole. They are sometimes referred to as product-sustaining or product line costs.
For example the cost of the design relating to a product will be specific to that product – but would not be described as a batch or a unit related cost.
This is because the cost of design has been incurred to support the product line overall.The other type of costs are know as facility level costs or organisational costs – these are general manufacturing overheads which cant be traced to any particular unit, batch or product line.
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