Activities, their drivers, and their costs may be classified as unit-level, batch-level, product-level, and facility-level. If activity-based costing (ABC) information is prepared for internal purposes, which costs are most likely to be treated as period costs?

Answer (D) is correct.
A difficulty in applying ABC is that, although the first three levels of
activities pertain to specific products or services, facility-level activities
do not. Thus, facility-level costs are not accurately assignable to
products. The theoretically sound solution may be to treat these costs as
period costs. Nevertheless, organizations that apply ABC ordinarily
assign them to products to obtain a full absorption cost suitable for
external financial reporting in accordance with GAAP. However, for
internal purposes, facility-level costs should be treated as period costs to
avoid distorting decisions about cost efficiency, pricing, and profitability.