Century Point is a modern business club in the inner city of Brisbane. It is owned by Silvera Property Holdings, which operates additional properties in Auckland, Christchurch and Singapore. Century Point has 6 separate areas each with corporate facilities for various membership groups. Also on premises is a gymnasium, restaurant, and pool. The business club is organised in 5 departments: front desk, housekeeping, food & beverage, and customer relations. As part of its operation, Century Point regularly incurs the following costs:
General Manager's salary
Cleaning and maintenance costs
Utility costs
Depreciation on gym equipment
Advertising
Food and beverage costs
Depreciation on restaurant equipment
If Century Point is the cost object, which of the following best describes the cleaning and maintenance costs.
A) Batch-level cost
B) Customer-sustaining cost
C) Facility-sustaining cost
D) Organisation-sustaining cost

Question

Century Point is a modern business club in the inner city of Brisbane. It is owned by Silvera Property Holdings, which operates additional properties in Auckland, Christchurch and Singapore. Century Point has 6 separate areas each with corporate facilities for various membership groups. Also on premises is a gymnasium, restaurant, and pool. The business club is organised in 5 departments: front desk, housekeeping, food & beverage, and customer relations. As part of its operation, Century Point regularly incurs the following costs: 
General Manager's salary
Cleaning and maintenance costs
Utility costs
Depreciation on gym equipment
Advertising
Food and beverage costs
Depreciation on restaurant equipment
If Century Point is the cost object, which of the following best describes the cleaning and maintenance costs.
A) Batch-level cost
B) Customer-sustaining cost
C) Facility-sustaining cost
D) Organisation-sustaining cost

Quizplus · Accepted Answer

Cleaning and maintenance costs are considered facility-sustaining costs because they are necessary to maintain the overall facility's operations and are not directly tied to the production of a specific batch of goods, a specific customer, or the organization as a whole.

Century Point Is a Modern Business Club in the Inner