It is usually difficult to find good cost driver (cause-and-effect relationship) between ________ and a cost allocation base.
A) unit-level costs
B) batch-level costs
C) product-sustaining costs
D) facility-sustaining costs

Question

Quizplus · Accepted Answer

Facility-sustaining costs, also known as facility-level costs, are costs that are incurred to maintain the overall production facility, such as rent and property taxes. These costs do not necessarily have a direct cause-and-effect relationship with any particular cost allocation base, which makes it difficult to find a good cost driver for them. In contrast, unit-level costs have a direct cause-and-effect relationship with the number of units produced, batch-level costs with the number of batches produced, and product-sustaining costs with the number of product lines.

It Is Usually Difficult to Find Good Cost Driver (Cause-And-Effect