All of the following are types of activities that cause overhead except:

• A. Batch-level activities
• B. Direct material acquisition
• C. Unit-level activities
• D. Product-level activities

Answer: (B)

Verified step by step guidance

1. Understand the concept of overhead: Overhead refers to indirect costs incurred during production or operations that cannot be directly traced to a specific product or service. Examples include utilities, rent, and salaries of supervisors.
2. Review the types of activities that cause overhead: These include batch-level activities (costs incurred for a batch of products), unit-level activities (costs incurred for each unit produced), and product-level activities (costs incurred to support a specific product line).
3. Identify the exception: Direct material acquisition is not considered overhead because it is a direct cost. Direct costs are directly traceable to the production of specific goods or services, unlike overhead costs.
4. Compare the options: Batch-level, unit-level, and product-level activities all contribute to overhead, while direct material acquisition does not.
5. Conclude the reasoning: The correct answer is direct material acquisition because it is a direct cost and does not fall under the category of overhead activities.