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: Option 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.