Administrative salaries are an example of an organisation-sustaining cost in an ABC system.

Name: Administrative salaries are an example of an organisation-sustaining cost in an ABC system.
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Question

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Administrative salaries are typically considered as an indirect cost that supports the overall functioning of an organization, rather than directly contributing to the production of goods or services. Therefore, they are classified as an organisation-sustaining cost in an Activity-Based Costing (ABC) system.

Administrative Salaries Are an Example of an Organisation-Sustaining Cost in an ABC