Installing a new control panel on a factory production machine would be classified in the ABC cost hierarchy as a (an)
A)output unit-level cost.
B)batch-level cost.
C)product-sustaining cost.
D)facility-sustaining cost.
E)period cost because it is not related to the cost hierarchy.

Question

Quizplus · Accepted Answer

Installing a new control panel on a factory production machine is a facility-sustaining cost, as it relates to maintaining and supporting the facility's overall production capabilities rather than a specific unit or batch of products.

Installing a New Control Panel on a Factory Production Machine