The cost incurred by departments that support the production departments with such activities as maintenance, production control and storage are called?
A. autonomous costs B. service costs C. supporting cost D. subsidiary costs
Correct Answer: B
Explanation
Service costs are the costs incurred to provide or deliver a service. They have the element of manufacturing cost but are not directly involved in production. They include cost such as the use of power and water; fee for use of furniture carpeting/curtains, costs such as cleaning of common areas, costs of concierge or maintenance of common garden.
