For many types of service organizations such as hospitals, banks and airlines, the primary cost of operations is:
A) establishing and maintaining a presence on the Internet.
B) insurance and legal expenses.
C) coping with obsolescence that results from the rapid pace of technological change.
D) compensation of labor.

Question

Quizplus · Accepted Answer

Compensation of labor is the primary cost of operations for service organizations like hospitals, banks, and airlines, as the majority of their work is done by highly skilled professionals such as doctors, nurses, bankers, and pilots. The cost of labor includes salaries, benefits, and training expenses. While the other options given may also be costs incurred by these organizations, they are not the primary costs of operations.

For Many Types of Service Organizations Such as Hospitals, Banks