In costing and budgeting hierarchy, an example of product sustaining cost is __________?
Correct answer: B. product design cost
- A. initial offering cost
- B. product design cost
- C. product marketing cost
- D. batch marketing cost
Explanation
Product-sustaining costs support an entire product line, regardless of the number of batches or units produced; product design is an example. Initial offering and batch marketing costs are tied to other activity levels.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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