An element is defined with costing type as Fixed Costing. Which costing levels are considered while building cost account?

• A. Payroll, Department, Element Eligibility
• B. Payroll, Element Eligibility, Department, Element Entry
• C. Payroll, Element Eligibility, Element Entry
• D. Payroll, Person Element Entry, Department, Job or Position, Person, Element Eligibility

Answer: (C)

Fixed costing uses three specific levels to build the cost account: Payroll, Element Eligibility, and Element Entry. Payroll identifies the payroll run the cost belongs to, Element Eligibility determines whether a particular element is eligible to be included in the cost calculation, and Element Entry specifies the actual cost element being charged. These three together define the fixed relationship that ties a cost to the element being paid for in a given payroll.

Departments, jobs/positions, persons, and similar attributes are not used in fixed costing to build the cost account. They come into play in other costing approaches or when you need more granular allocations, but for fixed costing the focus is on the payroll context, the eligibility of the element, and the specific element entry itself.