Château Joyal is an historic hotel in the heart of old Quebec City. It is owned by Riel Hotels, which operates additional properties in Halifax, Montreal, and Winnipeg. Le Château Joyal has 9 floors, with approximately 20 rooms per floor. Facilities also include a workout room, restaurant, and pool. The hotel is organized into 5 departments: front desk, engineering, housekeeping, food & beverage, and customer relations. As part of its operation, Le Château Joyal regularly incurs the following costs:
General manager's salary
Housekeeping supplies
Utility costs
Amortization on workout room equipment
Advertising
Food and beverage costs
Amortization on restaurant equipment
If Le Château Joyal is the cost object, which of the following best describes the general manager's salary?
A) Batch-level cost
B) Customer-sustaining cost
C) Facility-sustaining cost
D) Organization-sustaining cost

Question

Quizplus · Accepted Answer

The general manager's salary is a facility-sustaining cost because it is a cost incurred to support the entire facility, not tied directly to the production or service of specific units, customers, or batches.

Château Joyal Is an Historic Hotel in the Heart of Old