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Setup cost is a type of cost

This question belongs to Commerce Financial Management
Financial Management
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Setup cost is a type of __________ cost.

Answer & Solution
Correct Answer: Option A
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.
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